Ashkelon expansion gains momentum

• Date: 08 April 2021
• Published date: 08 April 2021
• Publication title: Globes (Rishon LeZion, Israel)

Between 2017 and 2018 Jerusalem was the city with the largest number of real estate deals, according to the Central Bureau of Statistics with between 4,000 and 4,500 deals each year - 6% of all the real estate deals in Israel. In second place was Haifa, which also had a large number of homes bought for investment, with 5% of all deals. Tel Aviv accounted for 4.5% of all deals in fourth place and far down the list of Israel's 16 biggest cities, where real estate demand is at its highest, was Ashkelon with 3% of all deals.

But in 2020 the situation changed. Jerusalem, Tel Aviv, Haifa and Beersheva saw a fall in the number of deals, while the number of homes bought in Ashkelon jumped to 4,200, putting it in first place with 5% of all deals.

This demand was also reflected in price rises. While housing prices around the country rose 4.3% on average, according to the Central Bureau of Statistics, in Ashkelon prices rose 6%. But even after this steeper than average rise, the average price of an apartment in Ashkelon in the fourth quarter of 2020 was NIS 1.2 million, compared with the national average of NIS 1.6 million.

Historically, Ashkelon, a coastal city 50 kilometers south of Tel Aviv, was perceived negatively as a city with a relatively low socioeconomic status and far from the more prosperous center of the country.

That began to change about 20 years ago with the completion of the marina and the development of vacation homes, which enjoyed a certain demand from foreign residents, who were able to find better value homes than in resorts further north such as Herzliya, Netanya, and even Ashdod. Even so only hundreds of new homes were built each year before 2008.

But after the sharp rise in real estate prices in 2009-2010, the government began rezoning massive amounts of land to temper further rises. Ashkelon's huge advantage was that the municipality had vast amounts of land reserves owned by the state and the city became a focus of major construction projects. So from 2010, Ashkelon starting climbing up the real estate ladder in terms of real estate construction and housing deals. Overall between 2015 and 2020, Ashkelon was in fourth place nationwide in terms of the scale of new residential construction.

Ashkelon Building Contractors Association chairman David Rosner said, "The jump in construction in the city and the number of deals has been due to the government's buyers target price program. This is a beautiful and attractive coastal city, which is not...