Kahlon discovers the Laffer Curve

Home purchases in Israel by foreign residents fell to 2,241 homes in 2016, down 31% from 2015, according to figures provided by the Ministry of Finance. The sharpest fall was in Jerusalem where home purchases by foreign residents fell by 41% with a 25% fall in the Tel Aviv and Netanya regions. The fall in home purchases in Israel by foreign residents was far sharper than in the entire market and means that only 2% of homes now purchased in Israel are bought by foreign residents. The sharp fall was due not only to Minister of Finance Moshe Kahlon's actions, including raising the purchase tax from 5% to 8-10% on luxury apartments, in addition to the elimination of the exemption from betterment tax that took effect in 2014, but also the strengthening of the shekel, making it more expensive for foreign residents to buy homes.

There was not a single housing deal over NIS 50 million in 2016, whereas there were several such deals in the previous year and several deals worth more than NIS 100 million in 2014. In Jerusalem, only two luxury apartments (over NIS 10 million) were bought by foreign residents in 2016, down from 12 in 2015. Nevertheless, there was no shortage of major deals last year, with 19 of the 30 most expensive real estate deals last year in Tel Aviv.

The most expensive real estate deal was the NIS 44 million paid for a 360 square meter penthouse on the 31st and top floor of the NAM Tower in Tel Aviv's Park Tzameret. The NAM Tower is considered a less prestigious property than those in the YOO Towers precinct overlooking the Ayalon, in part because of the financial difficulties encountered by the developers of NAM Tower.

The second most expensive real estate deal was the NIS 42 million paid for a 312 square meter duplex in a five storey boutique building under construction at 7 Chelouche Street in Neve Tzedek, Tel Aviv.

In third place was the NIS 40 million paid for a 565 square meter apartment on the 41st floor of the 42 storey Meier Tower at the corner of Allenby Street and Rothschild Boulevard in Tel Aviv. The apartment is registered under the trusteeship of Yigal Arnon law firm but it is believed that it belongs to Mobileye chairman Prof. Amnon Shashua.

In fourth place is the NIS 32.8 million paid for a house at 21 Galei Tachelet Street in Herzliya Pituach. The buyer is a private company registered in Israel at law firm Dan Allaouf with the parent company registered in Luxembourg, a popular tax haven.

In fifth place is a house in Kfar Shmariyahu at 38 Nuriot Street bought for NIS 32.1 million by Ron and Galit Bar-On.

In sixth place is a 383 square meter apartment on the 22nd floor of Akirov Towers in Tel Aviv, which was sold for NIS 30 million.

Also in sixth place is a 25th floor 249 square meter penthouse in the Rova Lev Ha'ir project in Tel Aviv's Mazeh Street, which was sold for NIS 30 million.

In eighth place is a 208 square meter, 15th floor apartment being built by David Intercontinental Hotel owner Henry Taic in Migdalei David at 55 Hayarkon St., just north of Opera Tower. The apartment was sold for NIS 27 million.

In ninth place was a house at 23 Magal Street in Savion sold for NIS 26.7 million.

Also in ninth place is a house on Hahoresh Street in Kfar Shmariyahu sold for NIS 26.7 million.

In eleventh place is a three-floor 450 square meter house slated for preservation at 17 Shimon Rokach Street in Neve Tzedek in Tel Aviv, which was sold for NIS 25 million to Jewish billionaire Podu Zabludowicz, who owns the Tamares Group, which operates hotels in Israel.

Also in eleventh place was a 555 square meter 23rd floor duplex apartment in the aforementioned Rova Lev Ha'ir project in Tel Aviv's Mazeh Street, which was sold for NIS 25 million.

In 13th place is a 208 square meter apartment on the 11th floor of the aforementioned Migdalei David at 55 Hayarkon St., just north of Opera Tower, which was sold for NIS 23.5 million.

In 14th place is a 21st floor apartment in Rova Lev Ha'ir project in Tel Aviv's Mazeh Street, which was sold for NIS 23.2 million.

In 15th place is a 205 square meter ninth floor apartment in Migdalei David at 55 Hayarkon St., just north of Opera Tower, which was sold for NIS 22.2 million.

In 16th place is a 150 square meter, ninth floor apartment in the Sea and Sun project in north Tel Aviv, which was sold for NIS 21 million.

In 17th place is a 298 square meter apartment on the 16th floor of the aforementioned Akirov Towers in Tel Aviv, which was sold for NIS 20 million

Also in 17th place is a 606 square meter house at 52 Havatzelet Hasharon Street in Herzliya Pituach, which was sold for NIS 20 million.

In 19th place is a 500 square meter 11th floor apartment in Remez Tower on the corner of Remez and Arlozorov Streets in Tel Aviv, which was sold for NIS 19 million.

In 20th place is a house at 45 Hazorea Street in Kfar Shmariyahu, which was sold for NIS 18.2 million.

In 21st place is a house at 23 Shevet Menashe Street in Herzliya Pituach, which was sold for NIS 18 million.

In 22nd place is a house at 127 Ramat Yam Street in Herzliya Pituach, which was sold for NIS 17.7 million.

Also in 22nd place is a 500 square meter 13th floor apartment in the aforementioned Remez Tower on the corner of Remez and Arlozorov Streets in Tel Aviv, which was sold for NIS 17.7 million.

In 24th place is a house at 4 Haprachim Street in Moshav Rishpon, which was sold for NIS 17.6 million.

In 25th place is a 269 square meter Jerusalem apartment at 1 Emek Refaim in the German Colony. On the third of a fourth floor preserved building which forms part of the Isrotel hotel and residential project, the apartment was sold for NIS 17.6 million.

In 26th place is a 390 square meter house at 18 Hanoter Street in the Afeka neighborhood of Tel Aviv, which was sold for NIS 17.3 million.

In 27th place is a third floor apartment in one of the new high rise buildings in Tel Aviv Bavli neighborhood, which was sold for NIS 17.1 million.

In 28th place is a 266 square meter penthouse on the eighth and top floor of the Mamilla project in Jerusalem, which was sold for NIS 17 million.

In 29th place is a 190 square meter apartment in Ofer Investments Herbert Samuel 10 project on Tel Aviv seafront, which was sold for NIS 16.8 million.

In 30th place is a 430 square meter house at 52 Tzahal Street in Tel Aviv's Tzahala neighborhood, which was sold for NIS 16 million.

Source Globes