Many Israelis fantasize about a detached house with a yard: During the Corona period, there was even an increase in demand for spacious homes with an adjoining garden following the round of closures, the guidelines restricting the range of motion and the need for insulation. Despite this, most Israelis live in apartments due to the large differences in prices between a private house, cottage or villa, and a housing unit in a residential building. Others are defined as “housing reducers” and sometimes prefer to sell the private home in favor of living in a smaller apartment in the tower.
Even those who have a penny in their pocket find themselves in recent years increasingly interested in buying new apartments in high-rise buildings rather than ground-level buildings – and there are quite a few types: mini-penthouses, penthouse-duplexes and more. Evidence shows that the construction starts of residential towers in the first three quarters of 2020 accounted for about one-fifth of all construction starts in Israel, and the fact that there is a lack of available land reserves for construction in the demand areas encourages planning institutions to approve more and more high-rise apartments.
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“Supply of ground-level land is shrinking but demand is rising.” Private houses in the Givat Alonim neighborhood in Kiryat Ata
(Photo: Gil Cohen)
“We lived in a detached house with three levels and a large garden for almost 30 years, this is a house we built and raised our four children there,” says Sigalit Sharaf, 65, a Netanya resident who recently decided with her partner Giora to sell the private house and move to the tower. “The children left the house, each went his own way, and the house was very large. It was clear to me that there was no point in owning such a house.”
“One day I told my husband – let’s look for an apartment with a sea view, and if you find a suitable apartment we will move – and so it was,” she continues. Sharaf purchased an apartment on the 27th floor of the Riga Towers Towers in her hometown. She said, “When we sold the house my hand shook. I was in tears because we left all the memories in this house. But today we live in a tower located on the seafront, we have a big balcony to see all the beautiful sunsets, and we are comfortable in it.”
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Sold land and moved to the tower. Violet and Giora Resin
(Photo: Zvi Sharaf)
The disappearance of landowners in Israel can be clearly seen in the data published by the state. An analysis of data from the Central Bureau of Statistics shows that in the first three quarters of the past year, construction began on less than 6,000 private homes – a drop of about 30% in construction starts and the lowest figure in the last decade. These are 5,775 detached houses whose construction has begun, with an average of 12,400 detached houses built in the last five years each year.
The rate of construction starts of detached houses in the past year reached only 17% of the total number of construction starts in Israel – the lowest figure since 1995. For comparison, in 2018 and 2019, construction began on 10,718 and 10,803 detached houses respectively – a rate of about 22 % Of total construction starts. The data also show that in 2017, construction began on 11,674 single-family homes – a rate of 23% of all construction starts. Between 2010 and 2016, construction began on more than 15,000 single-family homes each year – a rate ranging from 27% to 40% of all construction starts, with the peak in 2007 with a 48% rate on private home construction starts.
“Detached houses in Israel are a declining product,” says Dror Ohev Zion, CEO and owner of Dera Real Estate Marketing, which markets projects of detached houses throughout the country. “This trend seems to continue in the coming years due to the need for densification and conservation of green space, so the supply of private homes is declining. However, demand for living in a home with a garden continues to climb, especially in the Corona period, and when supply decreases and demand increases – by law. The economy, their prices are expected to rise. “
“Detached houses in Israel are a declining product. It seems that this trend will continue due to the need for densification and the preservation of green spaces.”
Most of the land reserves that allow the construction of detached houses are usually found in the peripheral localities and in the Judea and Samaria area. “Thanks to the state’s investment in public transportation, trains and roads, Israel’s perception of the periphery is changing, so the demand for land in the periphery is intensifying – a trend that began, by the way, long before the corona,” adds Ohev Zion.
Despite the thought that more private homes are being built in moshavim and kibbutzim, the CBS data show that about 67% of the construction starts of detached houses were made in cities and urban localities (3,888); about 12% in moshavim and kibbutzim (construction starts of 685 detached houses and 708 detached houses Respectively); and about 9% in rural localities (534).
Indeed, the CBS data show that the areas leading in the start of ground-level construction starts in the first three quarters of 2020 are Israeli localities in Judea and Samaria (up to 10,000 residents), characterized mainly by low-rise homes, with 244 start-ups of private homes, and cities in the southern periphery. And the northern.
According to the data, 186 ground-level units began to be built in Be’er Sheva in the past year; It is followed by Ofakim on the list with construction starts of 137 ground-level units; Rahat with 133 ground-level construction starts; Hadera with construction starts of 108 ground-level units; Rishon Lezion and Kfar Yona with construction starts of 84 ground-level units in each of the cities; Arad with 76 private homes that began construction.
The data also show that construction of 66 ground-level units has begun in Jerusalem; Zichron Yaacov with 65 ground-level units; The settlement of Tel Mond in the Sharon area with 60 private houses that began construction; Hura settlement with construction starts of 59 ground-level units; Dimona with construction starts of 57 detached houses; Atlit (53); Yokneam Illit, Gan Yavne and Beit She’an (52 ground-level construction starts in each of the localities); Tel Aviv-Yafo and Lehavim with construction starts of 51 detached houses in each of the localities and 48 private houses that began construction in the locality of Meitar near Beer Sheva.
“Interest in living in detached houses in the past year has climbed compared to 2019, especially in villas and cottages,” says Sarah Ilin, marketing manager at Sharviv, which markets detached projects in Kiryat Ata. “The last year, in which many people have been locked in their homes for a long time, has naturally increased the need for a larger and more comfortable living space. The Israeli dream of a home with a garden still exists and is the lot of many, especially during this period. Of ground-level and they are becoming a disappearing product. “
“For a long time now, the state has hardly marketed single-family homes, except for places that by definition require this type of construction,” adds Ofra Hadad, VP and owner of Euro Israel, which markets a cottage project in the new Or Yam neighborhood in Or Akiva – one of the few tenders published in recent years for single-family homes. By the state, she said, “In the situation that has arisen, contractors who want to build private homes today are unable to purchase land from the state.”
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Leads in the construction of detached houses. Beer Sheva
(Photo: Herzl Yosef)
Prices of private homes have also climbed over the years, both against the background of the general rise in housing prices and due to the drop in supply compared to the rise in demand. According to an analysis conducted by the Bureau of Real Estate Appraisers, in the last two years prices have climbed at an average rate of over 10%. In Tel Aviv, for example, the average price for a plot of land in 2020 is NIS 5 million – an increase of 12.6% compared to 2018, when the average price was NIS 4.415 million.
The data also show that in Jerusalem the average price of a private home was NIS 3.9 million in 2020 – a jump of 16.5% compared to 2018, when the average price of a detached house was NIS 3.35 million. In Rishon Lezion, the average price of a detached house in the past year was NIS 3.6 million – an increase of 8% compared to the average price of a private house in 2018, which then rose to NIS 3.3 million. In Ashdod, a private home costs an average of NIS 2.7 million – a jump of 15% compared to 2018, when the average price was NIS 2.295 million.
In Netanya, the price of a private home increases by an average of NIS 2.9 million – a 10% increase in price compared to 2018, when land-based increased by NIS 2.62 million. In Be’er Sheva, a private house will currently cost you NIS 1.95 million – an increase of 11.4% in prices compared to 2018, so such houses were purchased for NIS 1.75 million. A detached house in Holon rose in 2020 by an average of NIS 2.8 million – a jump of 15% compared to 2018, when the price was NIS 2.38 million. While in Rehovot, the price of a private home is on average NIS 2.1 million – an increase of 10% compared to 2018, when the price was NIS 1.89 million.
“When the start of construction of detached houses falls and the demand continues to rise, this directly affects the price level,” explains Haim Mesilati, chairman of the Real Estate Appraisal Bureau. “This is a long-standing trend, of a minority in starting construction of detached houses versus demand that remains rigid.” .
Chairman of the Chamber of Appraisers Haim MesilatiPhoto: Dana KoppelHe said, “This year the Corona crisis seems to have particularly sharpened the benefits of ground-level versus residential housing. The fact that private homes have an exit to the garden, which allows homeowners to vent out into the open air during closures, has raised ground-level funds. I estimate this trend will continue in the coming years “In view of the fact that there is no expectation of an increase in the construction starts of houses of this type. The line led by the planning committees is the density of construction in the center of the country through textured construction or high-rise construction, in order to increase the supply of housing.”