From rags to riches: real estate prices in Bat Yam, the southern “Cinderella” suburb of Tel Aviv, are rapidly catching up with the rest of the metropolis. T
Just a few years ago, Bat Yam was seen as Tel Aviv’s poor and run-down neighbor, despite its coastal position. Its housing prices were typically 20% lower than the neighboring city of Holon, which is further inland, but now they have overtaken them. Two years ago you could buy reasonably priced housing in the city of Bat Yam, south of Tel Aviv, but today the prices are almost on a par with other more fashionable Tel Aviv suburbs.
Bat Yam already has two stations on train route between Tel Aviv and Rishon Lezion. and it will soon have a terminus for the planned Tel Aviv Light Railway. Thanks to a dramatic urban renewal project, which has included upgrading the schools, public spaces and cultural infrastructure, the city now offers attractive options for families looking for suburban neighborhoods with a short commute to Tel Aviv. As the standard of living in the city improves, Bat Yam will become a high-grade commuter community for the overcrowded metropolis.
Alongside residential developments for commuters, Bat Yam is also developing itself as “the New Israeli Riviera”. It has 6 beaches and a 3.2 km promenade along the sea front that connects up with the Tel Aviv boardwalk south of Jaffa. Three major hotels are being built, together with a park for outdoor cultural activities and a number of luxury high-rise apartment buildings.
The Sea Park development occupies prime real estate on the coast to the south of the city, close to Rishon Lezion. Its developers have recently sold a number of luxury apartments and penthouses there for over 10 million shekels. Purchasers are willing to pay high prices for an apartment in a luxury tower with a view of the Mediterranean, because it is still significantly lower than comparable properties in central Tel Aviv. Foreign investors are among those snapping up these luxury bargains.
Further back from the sea, ordinary four-room apartments that were sold a few years ago for NIS 2.6-2.7 million are now selling for NIS 3.1-3.2 million. Such a rapid increase in housing prices would never have been realistic in the past, but there are two additional factors at play. Firstly, the Bat Yam Municipality is giving priority to the building of smaller apartments and favouring the Tama 38 demolition and construction model. This is encouraging investors to buy apartments in buildings slated for redevelopment, in expectation of great returns when these medium sized buildings are replaced with tall towers, comprising many more apartments.
Secondly, a recent announcement by the Ministry of the Interior that the Tel Aviv and Bat Yam municipalities will be merged in 2023 may have added fuel to the fire. Property investors may be taking a view that Bat Yam will soon become a southern suburb of Tel Aviv, and expecting its prices to move toward those of its more exclusive northern suburbs.
The Bat Yam story is a typical Israeli fairy story, where a “Cinderella” city is magically transformed into a real estate “princess”. At Creative Estates we believe in looking beyond the obvious neighborhoods and identifying areas that are ripe for development, in the expectation that they too could undergo a magical transformation in just a few years!
Talk to Creative Estates Israel if you own real estate or are interested in investing in a property in Bat Yam or any other central city in Israel.