Demand in Israel doubles for houses with gardens

House in Herzliya

Data from Yad2's real estate site shows that interest in moving away from city centers has surged during the Covid-19 pandemic.

With Israel's third lockdown at its peak, data from real estate buying and selling site Yad2 reveals that interest in suburban houses has doubled over the past year. In 2019, four million people searched for a property in the "houses" section, while in 2020 the number rose to 8.5 million.

Confounding all the forecasts about the renewal of urban and city center living, Israelis are looking for their own garden.

For example, Yad2 found that 4,304 people searched for a house and garden in Tel Mond in 2019, while 9,500 searched for a house and garden there in 2020. 5,180 searched for a house and garden in Zikhron Yaakov in 2019 compared with 9,982 in 2020. Similarly 9,539 people searched for a house and garden in Hod Hasharon in 2019 and 17,364 in 2020, 6,562 in Gedera in 2019 and 11,089 in 2020.

At the same time, Yad2 reports, the number of houses and gardens up for sale or rent fell, even in remote locations like Arad and Yerucham.

Yad2 research director Nir Chen explained that there is a close connection between the repeated lockdowns and the rise in demand. "We see that during the first lockdown, in March and April, there was a low-point in demand because of social distancing and financial anxieties. From May, we see a substantial rise in demand for houses. People understood that they need more space. When you spend more time in a specific place you see the things that aren't so good."

He continued, "From May you can see an insane rise in demand for houses. If in March 92,000 people searched for a house, in April the number rose to 136,000 and in May, June. July, August and September it reached 150,000 users. In the second lockdown there was a little dip in interest but in October 217,000 people searched for a house."

Anglo-Saxon real estate company branch manager in Pardes Hana-Karkur Yaniv Gotfrud describes growing demand. "Before the Covid-19 pandemic began there was a rise in demand. I think it was due to the elections and the fact that Kahlon's (then Finance Minister) plans were ending. In March everything ground to a halt but from the moment that the lockdown began easing and in June in particular, there was an insane stream of people."

"Most of the enquiries, I would define as 'mature demand,' in other words those who had been holding back for a while and took their time before coming. We also identify another market segment of people from the central Israel region who sat at home during the lockdown and realized that there home was no longer suitable, too small, without any outdoor areas, and a garden in which the children can run around in. The peak was in August and September. The vast majority of buyers are couples with children."

Anglo-Saxon branch manager in Gedera Rotem Dror has also seen rising demand for a house and garden although there has not been a rise in the number of actual sales. "People contacting us are seeking as much space as possible because of Covid-19. In meetings with us many ask for a house and garden. Older couples who planned to sell their house and garden have stopped the sale. They prefer to stay in a house with a garden."

Who are the people interested in a house and garden in Gedera? Where are they from?

"Gedera is relatively close to central Israel and sits alongside major highways, so it is attractive for many. There are people moving up to bigger homes coming to Gedera but also people coming from Rishon Lezion and Jerusalem. These are people that haven't got the means for a house and garden in the city."

Prices are going up

RE/MAX branch manager Afula Ohad Kronenberg says that prices are already skyrocketing. "In Afula, there is generally large demand for apartments and houses and gardens in particular. The demand comes from people buying bigger homes with a dream of a house and garden. Previously the difference between an apartment and a house and garden in Afula was relatively small. A four room apartment in a new building cost about NIS 1.1 million and a semi-detached house with a garden cost NIS 1.4 million. Covid-19 has changed all that and the average price of a house and garden has risen to between NIS 1.7 million to NIS 1.9 million. As a result of a shortage in supply, there is a shortage in houses with gardens and because of the demand, prices have begun to rise."

Data from RE/MAX based on completed deals show there was a significant rise in house prices in 2020. In Yavne, Safed and and Kiryat Malakhi there was a rise of more than 20%. In Ra'anana, Kfar Saba and Tiberias prices rose 15-20%. In Petah Tikva, Ashdod, Holon, Rosh Ha'ayin, Reut, Beit Shemesh and Nof Hagalil, prices rose 10-15%. In Beersheva, Rishon Lezion, Rehovot, Netanya, Nahariya, Afula, Maccabim, and Shderot prices rose 5-10%, and in Jerusalem, Akko and Hadera prices rose 5%.

Urban planner Ofer Lerner, who belongs to Merhav Movement for Israel Urbanism, believes that the interest among city dwellers in moving to the suburbs demonstrates defective urban and architectural planning. "The Covid-19 crisis has exposed in a very clear way that the fact that our housing units are not working well. We put too much emphasis on square meters, on urban renewal, transport, but not enough on planning housing units, on the connection with the outdoors, with the quality of shared spaces and public areas."

"Because of the situation, different householders want to switch from apartments to a house and garden. From this to dump it onto the falling status of the city is going too far. People still, even in the current situation, get a wide range of solutions in the city that they couldn't get from neighborhoods with houses and gardens."

Prof. Nurit Alfasi, an expert in urban planning and member of the Israel Planners Association, does not believe that cities will lose their attractiveness. "When there are no bars and fitness clubs and possibilities to meet people in the street and all the advantages of city center living aren't functioning then there is no apparent point in paying the price. This is a process that we are seeing throughout the world."

She added, "I think that this situation is temporary and can end instantaneously when Covid-19 disappears, and I don't believe that demand for city living will be reduced. It's a fact that the most important thing for us is where we live. All of us know that this home is not just four walls and a few meters in the yard but what we can do from it. We need to go outdoors and the proximity to things is our opportunity and that is worth a great deal of money, because it produces a lot of money. I don't see this equation changing."

Israel Planning Administration director general Dalit Zilber referred to the impact of Covid-19 and the demand for suburban homes with gardens at the recent "Around 2050" Conference. "We think that the Covid-19 crisis won't cause people to abandon the cities but we must make the range of apartments more precise in planning housing units, and mainly the public space with more attention paid to trees, shade, small parks, and stores close to the home. We are a small densely populated country and within 20 years the population will nearly double to 15 million. We believe in moving closer to the cities so that we can protect the open spaces."

Published by Globes, Israel business news - en.globes.co.il - on January 18, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

House in Herzliya
House in Herzliya
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