A 178 square meter lot in Tel Aviv’s Neve Tzedek neighborhood has been sold for NIS 13 million. Negotiations over the deal have been taking place for 18 months and an agreement was finally signed on the second day of the current Iran war.
Neve Tzedek is characterized by many small lots ranging from dozens of square meters up to 600 square meters. The smaller lots are in narrow alleys, while the bigger plots are along central thoroughfares, primarily Shabazi Street. The high density building, combined with planning requirements, provide many challenges to landowners.
The Tel Aviv master plan, TA/5000, zones Neve Tzedek as a residential area with low-rise urban construction. The neighborhood has a plan from 1990, called the Neve Tzedek-Shabazi Neighborhood, which aimed to preserve the planning and architectural character by outlining rules for building renovations, expansions, and new construction on vacant lots. The plan has expired, but this is still the neighborhood’s basic plan, guiding future construction.
In terms of prices, the neighborhood is one of the most expensive in Tel Aviv, with prices starting at NIS 80,000 per square meter. There are some properties where the price crosses the NIS 100,000 per square meter mark, when it comes to the highest-end homes.
The value of land zoned for construction reaches some NIS 40,000 per square meter. There are almost no new deals for detached homes in the neighborhood, for the simple reason that most of them are the result of people who purchased old buildings, or empty lots, and built detached houses for themselves on them.
Due to the nature of the neighborhood and the smallness of lots, two adjacent buildings will frequently “touch” each other at what is known as the “zero building line.” This involves design issues and agreements between the property owners. Without such compromise, the building gap requirement between one building and the neighboring building must be 2.5 meters from the lot border, which reduces much of the area that can be built on, and even reduces its value by millions of shekels.
Due to this, each lot needs to be scrutinized on its own merits, due to its unique planning and other conditions.
The lot sold is considered medium-sized for the neighborhood, and on the land stands a dilapidated building owned by a family. According to the plans, two housing units can be built on the lot – each with two floors and an attic above the basement covering a total of 500 square meters for both units.
But this is on condition that there are no planning and design problems on it, and that the neighbors on each side of the lot agree that the building can reach the boundaries of their lots. In such a situation, it would have been reasonable to assume that the value of the plot could have reached around NIS 17-20 million. However, these days the market is more difficult, construction costs are significantly higher than in the past, and it is possible that these things are pressuring land prices downwards in the neighborhood, resulting in a deal price that is significantly lower than the expected range, and it is also possible that the lot has planning and other problems.
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Real estate appraiser Nadav Harpaz, owner of N.D.L Real Estate Development, served as the broker in this transaction who brought the parties together. According to him, the price of the lot dropped significantly due to planning problems that were discovered during the planning inspections on the lot. It turned out that one of the neighbors refused to allow the new homes to be “attached” to his house, which has deprived the buyer of significant building rights. Only over time has the architect hired by the buyers managed to find a way to build a house that would meet their requirements and meet the planning rules.
“This is a super challenging and not simple real estate transaction that was signed on the first business day of the Iran operation,” says Harpaz. “This is a deal that has been in the works for about a year and a half. The sellers wanted to exercise their rights to the lot, while the buyers saw the lot as having huge potential to build their dream home in Neve Tzedek.
“The stock of land available for construction in Neve Tzedek is very limited, and there are planning restrictions on the lot itself that have reduced the scope of building rights there. Finally, after a long process, the deal was signed for NIS 13 million. “This price is low compared to land deals that have been completed in the neighborhood in recent years. However, due to the planning restrictions on the lot, the spirit of the times we are in – an ongoing war – the high construction costs that have skyrocketed, and the expensive financing, I think that the bottom line is it is a good deal, both for the sellers and the buyers.”
Published by Globes, Israel business news – en.globes.co.il – on March 15, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.
