Calcalist, Amitay Gazit, 29.04.2021
Additional signs of rising apartment prices . This week, tenders were closed for 8 plots in the Neve Shamir neighborhood of Beit Shemesh, with a total of 611 apartments being built together. The results of the auctions can be described in one word: assault. 220 bids were submitted for all 8 pitches, an average of just over 27 bids per pitch. But what particularly marks the direction in which the housing market is heading is the gap between the bids of the winning companies and the early price estimate of the Israel Land Authority appraiser. The gaps between the early assessment of the real estate appraiser Rami and the winning bids were hundreds of percent.
The assessment is an early assessment by the Israel Land Authority appraiser of the value of the land, and is based on the price of the apartments in the area close to the lot in the tender. Thus, high bids from the assessment indicate that the construction companies estimate that they will be able to sell the apartments at significantly higher prices than the current market price.
The auctions were all in the traditional auction method where the highest bid wins, all the apartments will be sold on the free market and there will be no discounted apartments as part of a housing program at a reduced price by Litzman.
Neve Shamir Housing and Entrepreneurship of Disi Construction and Investments won 4 plots out of the 8 and will pay a total of NIS 230 million, including development for the construction of 320 apartments. In the plot for the construction of 97 apartments, its winning bid is for a payment of about NIS 34 million for the land, not including development - 9 times the previous estimate where the value of the plot was only NIS 3.45 million, for this plot 34 bids were submitted by various companies. In another lot for the construction of 28 apartments, the company submitted a bid 9 times higher than the assessment: 17 million not including development, compared with NIS 1.94 million, for which 27 bids were submitted.
The highest difference between the assessment and the winning bid was recorded in the complex where API Nativ Pituach won, offering to pay NIS 14.7 million for 40 apartments, while the early assessment estimated the value of the plot at NIS 856,000.
Sofrin and another partner won the land for the construction of 28 apartments thanks to a bid that is 8 times higher than the assessment: NIS 17.3 million compared to NIS 1.9 million.
In total, the state is expected to rake in a handsome income of almost NIS 500 million from these tenders, an amount that also includes the costs of developing the plots.