Part 2 - Central Israel's Fastest Growing Communities

The enormous demand for housing in Israel is leading many communities to take on new residents in numbers that will more than double their population. The second in a series of three articles.

The construction momentum in Israel has reached new heights over the last decade, with cranes and new neighborhoods under construction seen everywhere. Israels population is growing by 1.5% a year, but a survey conducted by the urban-economic consulting firm Svivot Megurim found that in some communities there is an annual growth of 5%, equivalent to a doubling of their population by 2030.

This accelerated construction is reflected in the thousands of new housing units being built in small communities and in small and mid-size towns. According to real estate appraiser and attorney Haim Mesilati, a population doubling over a short time period has unprecedented consequences for any community. The implications of accelerated development are usually positive, often reflected in the upgrading of a towns image, an influx of a young and well-established population, upgraded infrastructure and expanded public services. These are important tools for generating urban renewal that carries with it public and national benefits, in the form of an increase in the number of available housing units. The vast majority of communities slated for accelerated development are not located in traditional high-demand areas, leading to relatively reasonable prices.

Israeli real estate

Nevertheless, a massive addition to the available pool of apartments entails a non-negligible economic risk. Individual households usually constitute net losses to local authorities since property taxes dont cover municipal expenses. The key to financial resilience lies in the extent of commercial and industrial areas that are included in a local authoritys jurisdiction. Thus, municipalities that are interested in maintaining a sound economic basis while providing residents with high-quality services must ensure that thousands of new residential units are supported by business-oriented real estate as well.

These are some of the communities and towns that are expected to double in size in Central Israel:

Tzur Hadassah

Current population: 9,000; projected population in 2030: 25,000, a 177% growth. Price of a new 4-room apartment: 1.4 million shekels ($359,000).

Tzur Hadassah is one of the most pastoral and beautiful communities in Israel, located close to Jerusalem. 9,000 people currently live there, enjoying a high quality of life and good schools. Due to the large demand for housing there, a new neighborhood called Mount Sansan is in the planning, encompassing 1,100 new units.

The first phase of this project is almost ready for residents to move in. There are two other plans for constructing 2,000 housing units, which on completion in five years will increase Tzur Hadassahs population to 24,000, housed in 2,500 housing units, compared to 9,000 people living in 1,400 units today.

Shlomo Magnezi, the head of the villages residents committee, says that this projected growth presents us with significant challenges, mainly in keeping our quality of life and the rural community flavor of the place. The new Sansan neighborhood will join three other existing ones: the veteran neighborhood, the Har Kitron one and the Emek neighborhood. New arrivals are expected to be young couples improving their standard of living and older people wishing to move closer to their children.

Several construction companies are operating in Tzur Hadassah, including some of the largest ones in Israel. These include Shikun & Binui, Vaknin Amram and Sons, Itzhak Ofer and Morris Alon.

In addition to its ideal location, situated only 10 km southwest of Jerusalem, on Highway 375 which connects HaEla junction and Beitar Ilit, Tzur Hadassah is surrounded by parks and nature reserves. The pastoral atmosphere and natural forest surrounding it blend in with a diverse community and rich cultural life, as well as a school system that includes five schools: two elementary schools in the national education system, a national-religious school, an alternative elementary school and a joint middle and high school. There are also 12 kindergartens, three youth movements, a riding stable, a clinic, two commercial centers, a music center and an activity center that is open seven days a week.

The price range in the new neighborhood is 1.3 to 1.8 million shekels for detached houses or for apartments in 5 or 6-floor apartment buildings.

Tel Mond

Current population: 12,000; projected population in 2030: 25,000, a 108% growth. Price of a new 4-room apartment: 1.7 million shekels ($436,000).

Tel Mond is situated in the heart of the Sharon region, north of Kfar Saba and south of the Sharon intersection. It is considered a regional center for nearby communities, in terms of education and culture. Its jurisdiction covers 2,000 acres, 50% of which is farmland and the rest designated for housing.

Tel Mond has mainly detached homes that are adjacent to agricultural land. In recent years, rezoning has enabled the community to grow. Several projects have been approved, with 2,000 new units expected in the coming years. New roads and paths, public buildings, commercial areas and a school are planned for the communitys western side.

In a showcase project being built by Peri Real Estate from the Eldad Peri Group, garden apartments and duplexes are for sale at starting prices of 1.975 million shekels (just over $500,000). According to Yair Berdugo, Peri Real Estates CEO, as a small green community in the Sharon region, Tel Mond enjoys a diverse population and a family and community-oriented atmosphere, offering a high quality of life. The development of opportunities to buy detached homes in the center of the country at reasonable prices is attracting families looking to improve their housing and families in high income brackets, factors which contribute to the communitys strength and growth.

Ganei Tikva

Current population: 16,000; projected population in 2030: 35,000, a 119% growth. Price of a new 4-room apartment: 1.95 million shekels ($500,000).

Ganei Tikva enjoys a strategic location right at the eastern edge of the Greater Tel Aviv area. In a few years its status will be changed from local authority to a city. Development in its northern sections has greatly increased demand, with numerous building starts. The new northern neighborhood, only partly populated so far, includes 4,200 units of dense construction, with 26-story towers. There are plans for a square at the center of the neighborhood, with an open commercial center covering 9,000 square meters, as well as a new compound that will include several schools. New 4-room apartments are on sale for 1.95 million shekels (half a million dollars). Most buyers are young adults who grew up here, as well as young couples and people from nearby towns who are upgrading their housing and come mainly from Kiryat Ono, Or Yehuda and Petah Tikva.

In the more distant future, the community's last land reserve will be used for an additional neighborhood that will include 2,000 housing units. In the near and medium future, almost 6,000 new units will be constructed in the communitys northern side, an unprecedented scale, especially for a community that currently only has a population of 16,000 people.

Some of the projects are being carried out by Dunitz Brothers Construction, which is building two 23-24-story towers, containing 172 apartments, and another two 20-story towers with 156 apartments. According to Dalia Turiski, VP marketing at Rotem Shani, which is currently building in Ganei Tikva, there is an increase in the number of upscale apartments being sold in Ganei Tikva. Buyers want to benefit from a rural atmosphere and an urban setting at the same time. People who are upgrading realize that 15 minutes away from Tel Aviv they can purchase an upscale 5-room apartment for the same price as an old 2-room apartment in Tel Aviv. These families are looking to upgrade their standard of living, including green surroundings, a high-quality school system and communal and cultural life. Ganei Tikva is precisely the place that succeeds in blending these factors.

This project is being built around a large 1.75 acre park, and will include 420 units in five 23-story towers. One of the great advantages of this new neighborhood is the park that will be built between the towers. The park was planned with an emphasis on the requirements of pedestrians and bike riders. The green areas are completely disconnected from roads, making them safe for children. The company offers 165 square meter upscale penthouses with a garden view on the 23rd floor. There is also a 164 square meter terrace. Smaller 5-room, 140 square meter penthouses with a 40 square meter terrace are also available, with prices starting at 2.99 million shekels ($767,000).

Kfar Yona

Current population: 21,000; projected population in 2030: 45,000, a 114% growth. Price of a new 4-room apartment: 1.46 million shekels ($374,000).

Kfar Yona has experienced growth spurts before. In the last 20 years, its population has grown three-fold, and last year the Minister for Interior Affairs declared it a city. After experiencing several slow years, the city now faces massive growth once again. There are plans for six new projects, some of which have already been approved and others are in the planning phase. If all these plans are approved, the city will see 9,500 new housing units. Most of the new development is in the northern part of the city, beyond Highway 57 which leads to Netanya. The new areas include 1,150 units under construction, in buildings with 5, 9 and 14 floors, along with 12,000 square meters designated for commercial use and offices.

The citys improving image, its designation as green and rural and its location close to highways 2, 4 and 6 are attracting young couples and people upgrading their housing, mostly from the Sharon region. Another advantage is the relatively low housing costs, in comparison to nearby Netanya. Furthermore, there are plans for a new 100-acre compound offering employment opportunities close to the Beit Lid (Hasharon) junction.

Sharon Ben-Zvi, VP marketing and sales at the Meshulam Levinstein Contracting and Engineering Group, notes that weve found that in Kfar Yona with its central location there are opportunities and a great construction momentum going on. 20,000 people live there and its recently turned into a city. We believe it will continue to grow and renew itself, attracting thousands of young couples and families wishing to remain in the Sharon area at a reasonable cost. Kfar Yona is currently considered a real estate opportunity for these reasons, and were witnessing a high demand.

Rosh HaAyin

Current population: 42,000; projected population in 2030: 100,000, a 138% growth. Price of a new 4-room apartment: 1.46 million ($374,000).

Rosh HaAyin, on the eastern edge of the Tel Aviv metropolitan area, has many advantages: good transportation links to the central metropolitan area (a train and Highway 5) and to Highway 6, and a wide array of employment opportunities, including the Afek industrial park, along with the planned Lev Yisrael employment area, which will include 250,000 square meters of industrial and commercial space, 100,000 of which will include the largest shopping mall in Israel.

The largest population spurt will take place in the Psagot Afek neighborhood. This huge neighborhood is part of a project developed jointly by the municipality and the Ministry of Housing and Construction. It covers 750 acres on the hills to the east of the city. The neighborhood will include 14,000 housing units, in dense building with towers going up from 3 to 18 floors, along with a few hundred detached houses. The planning includes commercial spaces, public buildings and around 140 acres of open spaces. New 4-room apartments are going for 1.46 million shekels ($374,000) while 5-room apartments cost 1.69 million shekels ($433,000). In contrast to past years, Rosh HaAyin is attracting people not only from adjacent areas but from more distant ones such as the Sharon, the coastal plain and the Greater Tel Aviv area.

Among the contractors working there is API Capital, which together with Ortam Malibu is constructing a low cost housing project, with prices starting at 1.55 million shekels (about $400,000) for 4.5 rooms. Sarfati Shimon is also constructing a dense building project along with detached houses.