Tel Aviv is of the most famous cities in the middle east, if not the most famous one. This is mainly due to its vibrant nightlife, varied culinary experiences and diverse Jewish culture. But Tel Aviv is not the only good place to invest in Israeli real estate, as the suburban areas in Israel have been on a constant rise during the past few years.
After many years that the government and planning institutions in Israel have neglected the smaller suburban cities, during the past few years, they have been putting a special emphasis on developing them, therefore creating new and exciting real estate opportunities.
The Suburbs
There are many government plans to preserve many urban nature sites in cities other than Tel Aviv such as Jerusalem, which has suffered from environmental neglection for a while. A number of parks were built in 2013 and the first light rail system is Israel is already operational throughout the city. Be’er Sheva and Haifa are to more suburban cities, one in the southern area of Israel and the other in the North, that have both become amazing areas to invest in real estate.
During the past years, the Israeli government has shown great willingness to invest in important projects in these cities: building parks in and rehabilitating rivers and historical landmarks. Some more suburban areas for you to consider are Bat Yam, Ra’anana, Herzliya, Petah Tikva, Yehud, Kfar Shmaryahu, Ganei Tikva, Savion, Ganei Yehuda, Ramat Efal, Naveh Mosenson
Price rises
Many of these districts have experienced house price rises in the past few years like the Sharon (4.6%), Jerusalem (3.8%), Center and Jerusalem Periphery Towns (3.9%). Gush Dan in central Israel saw the highest price increase in 2016, with a rise of 11.7%. Gush Dan was followed by the Northern area of Israel (9.5%), The Qrayot area in Haifa (6.3%), Southern Israel(6.2%), and Haifa (5.9%). The main reason for this rise in real estate prices is the shortage in supply which is caused by low construction volumes.
Example – Haifa
Hadar Hacarmel neighborhood as the largest price increase in Haifa with prices climbing over the past eight years by 220%, which is more than three times than the average in Northern Haifa. The main reason they have risen so much is that the prices started at very low prices. They are still cheap now, which is why they have managed to attract many investors who sell them after two or three years and make a nice profit. Carmel Tzarfati is another area where real estate prices have recently risen – by 77.5%! It is one of the older neighborhoods in the city and is mainly characterized by its three-room apartments. The area hasn’t suffered any setbacks, although there haven’t been any major developments in the area either. The average price for older apartments is around 950,000 shekels.
According to the CBS, the total number of new purchases in suburban Israel in April 2016 rose by 2.7% which is 26,917 units a year. The supply has also increased in past years, averaging at 46,300 units built per year between 2011 – 2015. Taking all of this into consideration, house prices in the suburbs are expected to keep on rising in the near future, mainly due to the strong demand and a clear lack of supply.
