The year 2022 is shaping up to see a double digit increase in apartment prices. Last week in an auction for builders to purchase lots in the Neve Shamir section of Beit Shemesh, the bidding went through the roof. For the eight lots that were auctioned off, 220 bids were placed. There was an average of 27 bids per lot! 

 

While the Israeli government made a windfall profit, that money will ultimately come from buyers’ pockets. Just to give you an idea, the appraised value of a plot before an auction, is based on apartment prices in the area of the lot. So if the winning bids are hundreds of percentage points above the appraised value it means the builders believe that they can sell their apartments for that much more than the surrounding apartments were sold.

 

The winning bids for these lots were 8 to 15 times higher than the appraised value. So while previously apartments were being sold at 1 million shekel, the new apartment will cost the builders 800,000 NIS just for the land plus land development alone. What that translates into for the bottom line price of an apartment, only the builder knows.

 

So much for cheap apartments in Beit Shemesh or anywhere else. So if you are thinking about buying and apartment in Israel, the longer you wait the more you will pay out!

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