Interest in Moving to Israeli Settlements Grows Amid Talk of Annexation, Pandemic

Lockdown policies are pushing Israelis to seek bigger houses and more open space, and perspective annexation is the icing on the cake

Hadar Horesh
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A boy riding a donkey herds goats and sheep near the settlement of Kedar in the West Bank, on June 30, 2020.
A boy riding a donkey herds goats and sheep near the settlement of Kedar in the West Bank, on June 30, 2020. Credit: AMMAR AWAD/ REUTERS
Hadar Horesh

Is it talk of annexation? Or maybe the coronavirus? No one knows for sure, but what is clear is that interest in buying a home in West Bank settlements has been growing in recent months, even if the phenomenon hasn’t led to a surge of actual buying.

The real estate tracker website Madlan reports that searches for houses for sale in the settlements had grown by hundreds of percent since annexation talks emerged in the headlines. Netanyahu has never said what areas he wants to annex and so there’s no list of settlements that would come under Israeli sovereignty, but the interest is the highest in areas most likely to be annexed if Netanyahu ever moves forward with the idea.

“It’s at the highest it has been in the past five years. While the increase [in searches] began at the same time that the lockdown ended, it also came with the announcement of the annexation program, so you can say that while the annexation isn’t the central factor it certainly contributed,” said Eitan Singer, Madlan’s CEO.

The coronavirus is another factor, as Israelis weigh leaving crowded cities where it’s harder to avoid contagion and weather a lockdown, he said. Prices in settlements tend to be lower than inside Israel even for homes in easy commuting distance to greater Tel Aviv.

“There’s been an increase in searches for private homes at popular prices. As a rule people have focused their searches in the 1 million to 2 million shekel [$290,000-$580,000] range, but today they are going up to 2 million to 3 million. I think it’s about crowdedness. People want to live in a less crowded place, in a spacious house where you can be in quarantine if necessary,” he said.

Go West.

Prices for a private home in a two-family unit with a garden start at 4 million shekels (roughly $ 1,100,000) in towns in the center of the country such as Rosh Ha’ayin and Modi’in. Over the Green Line, which is just a few kilometers away, an equivalent property costs half that. There is less demand for homes in the settlements, partly because some buyers object for ideological reasons and many others out of security concerns. Many settlements are too far from places of employment.

Annexation, if and when it happens, isn’t expected to change that fundamental calculation.

The area that’s been the focus on annexation talk is the Jordan Valley. There is much more support in Israel, extending in many cases to the center-left, about annexing it. But the Jordan Valley is isolated and from a real estate perspective enjoys far less demand than other settlement areas.

Move to the Jordan Valley

Eitan Singer, CEO of real estate tracker website Madlan.
Eitan Singer, CEO of real estate tracker website Madlan.Credit: Tomer Appelbaum

Nevertheless, Vicky and Lior Asraf made the move with their six-year old son to the Jordan Valley settlement of Yafit, north of Jericho, from Jerusalem’s Kiryat Hayovel neighborhood. “I bought a private home for 500,000 shekels, which would have bought us maybe a room in a cheap Jerusalem neighborhood,” said Lior, age 37.

“Here we have a fantastic quality of life and I can get to my job in Jerusalem in half an hour. It’s not that far … I have a lot of friends that told me I was crazy when I left Jerusalem, but today a lot of people are interested in living in the area because the quality of life here is so good,” he said.

Still, Asraf admits, prices haven’t risen. Annexation, however, may change that. “If there’s annexation, I think the situation will change and they’ll start to rise here. There aren’t any security problems and even the Palestinians who live in the adjacent villages where we shop say they want to be included in the areas to be annexed,” he said.

As a rule, prices for houses in the settlements fall the further they are from the Green Line. But Alfei Menashe is just a few kilometers from the Green Line, due east of the Tel Aviv suburb of Kfar Sava, and in an area believed to be a candidate for annexation. On a clear day, you can see the Mediterranean from the settlement.

Most of Alfei Menashe’s residents are people who moved there for a bigger, better home that’s a reasonable commuting distance from Tel Aviv. Shai Rosenzweig, who heads the local council, confirms there’s growing interest in the settlement.

“I don’t know exactly why, but I assume that talk about sovereignty has been good for the market here,” he said. “I assume that if the plan happens, it will bring a new population here.”

Bentzi Lieberman, a lawyer handling land deals in the West Bank.
Bentzi Lieberman, a lawyer handling land deals in the West Bank.Credit: Tomer Appelbaum

On the other hand, last May competitive bidding for the sale of land to build 186 homes conducted by the Israel Lands Authority in the settlement attracted little interest. The tender drew only one bid to build 36 units. Rosenzweig blamed the tepid interest on the bidding process, not the lack of demand.

“Most of the demand today is for big apartments and private homes,” said Avi Peretz, CEO of the Re/Max real estate agency in Rosh Ha’ayin, which sells properties in the settlements. “Villas are for sale at prices of 2.3 million to 2.5 million shekels, which is the same price for a three-room apartment in Modi’in. In good locations prices have been rising more than the property market average.”

But, he added, “I don’t know if I can relate the situation to the talk about annexation.”

A view from Alfei Menashe, a settlement southeast of the Palestinian town of Qalqiliya, approximately 4 km beyond the Green Line, in the West Bank.
A view from Alfei Menashe, a settlement southeast of the Palestinian town of Qalqiliya, approximately 4 km beyond the Green Line, in the West Bank.Credit: Alex Levac

Not biting yet

Arik Vaknish, the franchisee and manager of Anglo-Saxon Real Estate office in Mateh Binyamin in the West Bank, has detected growing interest in buying homes in the West Bank, but so far it hasn’t led to any increase in sales. Annexation has aroused hopes, in his opinion, but the situation on the ground has not changed.

“Since the onset of the coronavirus the market has frozen and I haven’t seen any sign of a recovery in sales,” he said. “Our business is down 90% since the start of the crisis. The talk of annexation hasn’t changed things a lot. Some say that if annexation happens, prices would jump 35%. I think the increase will be 10% to 15%.”

Building contractors, in the meantime, have focused their attention on the biggest settlements, like Ma’aleh Adumim and Ariel. Ma’aleh Adumim has long been effectively regarded as a part of Jerusalem, and prices are only marginally lower than in the city’s outlying neighborhoods. In Ariel, prices are lower but they have begun to rise.

Avi Maor, CEO of builder Hanan Mor, says demand is strong in Ariel, largely because of the university, which generates demand for rental apartments and investors who buy properties to rent out. But, he adds, “there isn’t any connection to annexation.”

Credit: Oded Balilty/AP

Bentzi Lieberman, who once headed the ILA and today is a lawyer handling land deals in the West Bank, has high hopes for annexation. “I expect that if they opt for annexation, prices in the area will climb 15% to 20%. The reason isn’t due to the legal situation but more about getting the public’s attention and its willingness to invest. A good part of Samaria will effectively become part of Gush Dan [greater Tel Aviv]. In areas where there is clear Israeli sovereignty the government will be able to invest more easily,” he said.

Today settlers register their land with the army’s Civil Administration, which is the custodian for state-owned land, in line with Geneva Convention rules, said Lieberman. With annexation, registration would revert to the ILA as in the rest of Israel.

In fact, not all land registration in the settlements is so organized. In community settlements, which account for about a fifth of the settler population, the homeowner is deemed an “authorized person” (bar reshut), who is entitled to use the land but doesn’t actually own it.

The practical significance of that status is that in the event of a settlement evacuation, it won’t be in violation of any agreement with the homeowners. The authority to decide on the land’s use lies with the community association.