Have the costs of properties with protected rooms risen in contrast with the costs of properties with out a protected room, because the warfare started in October 2023? Two weeks in the past, the Financial institution of Israel printed a stunning research, which discovered that the premium on a protected room because the begin of the warfare – the worth distinction that the market costs for an house with a protected room in contrast with an house with out a protected room – has really decreased in terms of shopping for residences, however has risen considerably within the rental market.
Nonetheless, one other research commissioned by “Globes”, and performed by the Israel Actual Property Appraisers Affiliation, didn’t evaluate time intervals, however moderately residence costs as of now, and it exhibits a lot greater variations than these discovered by the Financial institution of Israel research.
Financial institution of Israel: 99,000 offers since 2023
Within the Financial institution of Israel research, researchers, Yossi Yakhin and Aya Talmon, examined some 99,000 offers carried out since 2023, two-thirds of which had been second-hand residences, in addition to adverts for the sale and rental of residences.
The research discovered that on the eve of October 7, 2023, residences with a protected room had been about 8.2% costlier than related residences with out a protected room, and that this premium had fallen to about 6.4% by the tip of 2024. Nonetheless, preliminary findings from the Iran operation point out that this premium jumped to ranges of 11%, though the importance of this information just isn’t but totally clear.
In distinction, the hire sought in house rental adverts confirmed a slight improve within the premium with the outbreak of the warfare, and beginning in Might 2024, after the primary missile assault from Iran, continued to rise. From Might 2024 till December 2024, the premium for a protected room was 3.7%-4.1% greater than its stage within the first 9 months of 2023, earlier than the outbreak of the warfare.
The Financial institution of Israel research didn’t study the explanations for these outcomes, which contradict the accepted narrative that the worth distinction widened between residences with a protected room and people with out a protected room. Of their evaluation, in the course of the interval studied, there was an expectation of an enchancment within the safety state of affairs after the tip of the warfare, and contemplating that the date of occupying the residences was estimated by the consumers as coming after the tip of the warfare, this lowered the premium for the protected room.
Alternatively, rental offers are for shorter phrases, and subsequently tenants examined the state of affairs in line with present standards and had been keen to boost the hire they pay, for an house with a protected room.
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The research additionally performed an preliminary examination of house costs in the course of the Iran operation, and located a sure improve within the premium for the protected room, each in house costs and in hire, however at the very least at this stage their statistical significance is unclear.
When the Financial institution of Israel researchers examined the massive cities, they discovered a major lower within the premium for protected rooms obtained in Tel Aviv and Ashdod, and a major improve in Beersheva and Netanya. Within the remaining locations, the findings are described within the research as non-significant, however there have been locations, similar to Haifa and Jerusalem, the place a wierd state of affairs is described, by which residences obtain a premium for not having a protected room. The researchers haven’t any reply as to why this happens.
“Globes” doable clarification for that is that residences with a protected room are sometimes positioned in comparatively new neighborhoods, whereas residences with out a protected room are typically positioned in older and extra sought-after neighborhoods, the place house costs are greater. For instance, the costly Rehavia and Beit HaKerem neighborhoods in Jerusalem, most of which should not have protected rooms, in contrast with Kiryat Yoval, the place there’s a wave of city renewal with comparatively low-cost residences.
On the identical time, the researchers additionally discovered that the homeowners of residences with protected rooms, who put them up on the market began with excessive preliminary costs, which represented a really excessive premium for protected rooms, and later lowered them when it grew to become obvious that that they had no consumers at these costs.
Actual Property Appraisers Affiliation: 4-room residences in 5 cities
The second research, which was performed completely for “Globes,” was by the Actual Property Appraisers Affiliation was completely different in nearly each side, from the examination methodology to the ultimate conclusions.
The Actual Property Appraisers Affiliation examined the worth variations of four-room residences with a protected room versus with out a protected room in 5 cities: Tel Aviv, Jerusalem, Haifa, Ashkelon and Nahariya, during the last three months. Nahariya and Ashkelon skilled extra rockets from Gaza and Lebanon, whereas Jerusalem largely remained “out of the warfare.”
The affiliation didn’t make do with simply evaluating costs, however made the comparisons primarily based on costs per sq. meter, as a result of the upper absolute worth of residences inbuilt current a long time stems, amongst different issues, from the variations in house sizes.
The Affiliation explains, “Residences constructed within the Nineteen Fifties, Nineteen Sixties and Nineteen Seventies often have a smaller variety of sq. meters, with a median of about 80 sq. meters for a four-room house. In distinction, the extra trendy building of the 2000s and onwards produced a median four-room house with an space of about 100 sq. meters. Subsequently, the extra right comparability is the typical value per sq. meter.”
The Affiliation additional explains that there are extra parameters that have an effect on house costs, primarily age, since residences with out a protected room are additionally older. The give attention to the final three months was meant to attempt to eradicate extra parameters that might have an effect on the worth of the house.
The research discovered that the best worth distinction per sq. meter between residences with a constructing allow and residences with out a constructing allow is in Tel Aviv, at about 20%. Haifa, Ashkelon and Nahariya present gaps of about 19%. These are cities that had been hit by many missiles in the course of the warfare, however because the defeat of Hezbollah in Lebanon and the elimination of Hamas’s rocket functionality from the south, there have been nearly no missile alerts in Ashkelon and Nahariya.
Aside from this, even in Iran operation, Ashkelon and Nahariya weren’t focused by Iranian missiles, in contrast with Haifa, which suffered a number of direct hits. This will have had a slight impression on the relative worth hole, which is barely greater in Haifa.
In Jerusalem, there’s a considerably smaller distinction within the gaps between the costs of residences with and with out protected rooms, in contrast with different cities examined. The reason for that is that there have been only a few missiles focusing on the town.
As well as, the Affiliation explains, “There are neighborhoods and areas in Jerusalem which can be in higher demand, and new building is much less substantial there, and subsequently the decrease the availability there and the upper the demand, the worth distinction narrows, though these are outdated residences with out protected rooms.”
This clarification, which applies primarily to the haredi neighborhoods, can most likely additionally clarify the unfavourable premium obtained by residences with a protected room in Jerusalem.
The same research performed by “Globes” on house costs within the final six months in Tel Aviv’s third and 4th (rova) districts revealed findings just like these of the Appraisers Affiliation: new residences and residences with a protected room reached costs of about NIS 71,000 per sq. meter, whereas residences with out a protected room rose by about NIS 54,000 per sq. meter. In these locations, the variations discovered had been greater, however these are two of the costliest neighborhoods within the metropolis, so it’s possible that the variations are additionally higher.
The query is whether or not rising the worth distinction between residences with a protected room and residences with out a protected room might result in a discount in tenants’ calls for in city renewal tasks, for added area. The chairwoman of the Appraisers Affiliation chair Nehama Bogin, doesn’t imagine so. “We’re not at a stage the place tenants will hand over on adjustments within the city renewal course of. For tenants, city renewal is a chance to enhance the standard of life and never simply an financial return on paper. Following the warfare, there’s a sure acceleration on the a part of tenants who notice and perceive the significance of an house with a protected room and a brand new constructing and don’t delay the method, and neither do they provide up on rising the scale.”
The chief economist: Demand grew after the missile hits
One other research performed by the Ministry of Finance chief economist discovered that demand for residences with a protected room will increase primarily after important missile injury.
The chief economist’s Might evaluation of the housing market discovered that the Iranians are the most effective promoters of gross sales of residences with a protected room, since after every time missiles had been launched from there in Might and October 2024 and as a part of the Iran operation in June 2025, gross sales of residences with a protected room elevated. Between assaults, the homebuyers diminished demand for protected rooms.
This means that our reminiscence might be shorter than we thought in the course of the warfare, and that already as we speak individuals are keen to compromise on unprotected residences, however in locations that go well with their tastes and desires. If that is certainly the case, and the relative calm from missiles continues, the worth variations between protected and unprotected residences that the Financial institution of Israel discovered will proceed to slim.
Revealed by Globes, Israel enterprise information – en.globes.co.il – on August 7, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
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