For young families priced out of homes, Galilee life remains out of reach
“Moving here, after 30 years in Tel Aviv, was a 180-degree change,” says Noa Calderon, 46, who moved with her family to Kibbutz Hukok in the eastern Galilee, exchanging the city’s chaotic skyline for the peaceful Lake Kinneret.
“The move was hard for me to process and acclimate to, but my partner and the children have been flourishing from the moment we arrived. My eldest son constantly says he feels free. The children can get around on their own at almost any hour, the pace of life is different, there is a sense of community here that I’d never felt before and there’s nature a few steps from the house. It heals the mind and body.”
They bought their house in the Galilee, mainly at the prompting of Calderon’s partner, slightly before demand surged: “We bought the lot in 2019, when the kibbutzim still permitted people who were not members to buy homes in extension areas. It was one of the last lots available in the extension; a privately owned, half-dunam [600-square-yard] plot ready for construction, for 600,000 shekels [$168,500 at the time]. With construction, the home cost us about 1.3 million shekels.”
The home is a significant upgrade from their Tel Aviv apartment. “We have 170 square meters of built-up space, with three bedrooms, a living room, a guest room and a large yard,” she says, amused to think about what they were paying up until two years ago for 85-square-meter, third-floor walk-up in Tel Aviv.
An hour’s drive away in the Western Galilee, Omri fulfilled a similar dream, moving his family to a kibbutz. “We’d been thinking about leaving the city for some time. Our dream was to find a home on a moshav with good schools and community life. Then came the pandemic, which accelerated things, especially when we were stuck in a 80-square-meter apartment in Kfar Saba,” he says. Even their concerns about finding employment were allayed by the coronavirus, Omri says. He and his partner – they work in law and engineering, respectively – started working from home part of the time, and found themselves returning to central Israel only two or three days a week.
However, they paid the price for waiting to live their dream. “When we just started playing with this idea, home prices were way lower than they are now,” says Omri. “Initially we were looking at empty lots near Lake Kinneret, and then later in the area where we bought. Before COVID, such lots were selling for 300,000-500,000 shekels. New homes that we saw at that time were being sold for less than 2 million shekels. We bought our house last January, and my market survey found that we paid way more than the initial prices we saw, but it would now be considered a bargain,” says Omri. The couple paid 2.6 million shekels for a 15-year-old, 260-square-meter home. “Homes we saw in Misgav were starting at 3 million shekels, and in our area homes are selling for 3.5-4 million.”
These stories are part of a trend. More and more Israelis are looking to move into the country’s hills, particularly into a single-family home, and these are becoming more and more rarefied.
“Starting with the first COVID lockdown, the spike in demand for single-family homes in the Galilee has been crazy. We’ve never seen anything like it,” says Nati Scheinfeld, an Anglo-Saxon real estate agency franchisee in the Western Galilee. “The number of interested buyers is unusual.”
Sheinfeld says that until the coronavirus pandemic, the vast majority of inquiries he received from potential buyers were from cities in the north, mainly Haifa, Karmiel and Nahariya. “At that time, 60% to 70% were residents of those cities, along with locals from rural parts of the Galilee and a fairly small number of people moving from other parts of the country. Nowadays, the volume of inquiries I’m receiving from potential customers from central Israel is enormous. They’re interested mainly in the more developed community [kibbutz-like] settlements and kibbutz extensions. From places like Kfar Vradim, Neve Ziv and Gush Mishgav to Ga’aton, Rosh Hanikra and Yehiam. The spike in interest has been crazy nearly everywhere. Although the properties are not cheap at all, families know that for the price of an old four- to five-room apartment in the center of the country they can buy a single-family home with a garden and lots of space.”
More Israelis are looking to move into the country’s hills, into a single-family home, and those are becoming more rarefied.
“The market dynamics in the Galilee over the past year or two is part of a broad increase in demand for single-family homes that isn’t being met with supply,” agrees appraiser Yariv Drori, head of the research committee at the Land Appraiser’s Bureau. Drori notes that for several years, Israel has been advancing a clear policy of preferring dense construction, given that land is a scarce, expensive resource, leading to fewer and fewer construction plans approved for private homes. This policy began before the pandemic, which accelerated the demand trend. “Beyond the fact that many people started working from home, it seems that we’ve also become fed up with concrete and roads,” he says. “Meanwhile there are almost no vacant lots or new construction, and people seeing their home’s value steadily increasing are reluctant to put them up for sale. So the competition for these properties is increasing, and prices are jumping accordingly.”
Ori Ilan, who until recently was the chairman of the Northern District Committee, notes, “What’s happening in the north is what happened in central Israel five to 10 years ago, and it’s not just because of the pandemic. Part of this is it’s hard to find new single-family homes in Israel, period. There aren’t any more, and there are almost none being planned, so the demand for them is growing and people are willing to pay more.”
According to a review by real estate listings website Yad2 conducted on behalf of TheMarker, it appears that from 2019 through this past July, the median list price for single-family homes in the Galilee rose from 1.95 million to 3 million shekels. Over this period the number of searches for such homes increased 78% in the Galilee’s most popular locations. Most of the demand for private homes in this area is concentrated in two cities, Safed and Ma’alot-Tarshiha, followed by growing demand for Kfar Tavor, Kfar Vradim, Yavne’el, Givat Avni, Amirim, Kahal and Levon. Meanwhile, the number of listings for
single-family homes in these places dropped from 23% to 68%.
‘People turn homes here into businesses’
According to a review of listings on Yad2 from 2019 to July 2022, the median price for a single-family home rose from 1.95 to 3 million shekels.
Given the numbers, it is not surprising that the profile of homebuyers in the Galilee has entirely changed in recent years. “Buyers now are mostly well-off people who dream of a lifestyle change, and less the young couples and families just starting out that we’d see in the past,” says Iris Bitton of the Re/Max Halutzim agency in the Western Galilee. Until two or three years ago, the vast majority of her clients were homeowners from the Galilee looking to upgrade. Now they’ve been replaced by residents of central Israel. “Better-off people are moving in, buying everything on offer, even at prices that are high relative to the area. Owners see this, and it pushes prices up even more,” she says.
However, not all the buyers from the center are dreaming of living in the Galilee. “Many of the buyers are wealthy people who want vacation homes,” says Reuven Shapira, an Anglo-Saxon Sovev Kinneret franchisee. “People who have a boat on Lake Kinneret, or who’ve dreamed of a house by the water, and come here on weekends. Many of the homes in Migdal or Poria are like that. However, since COVID, we’ve seen many more people who are also looking to live here. But vacation homes still remain a sought-after product.”
Among the settlements and kibbutzim near the Kinneret, Shapira says there’s high demand for Moshava Kinneret, Migdal and Poria Elit, where he says “it’s almost impossible to find houses for less than 4 million shekels. We have only one Lake Kinneret, and people are willing to pay for the view and proximity.” Regarding the survey data showing that Givat Avni and Yavne’el are actually the most desirable destinations, Shapira says these two locales are considered more accessible than their expensive neighbors.
Alongside demand for vacation homes, quite a few people recognize the business potential of Galilee real estate. “In recent years, we have seen a growing number of people buying houses here and turning them into businesses, from short-term Airbnb rentals to vacation homes going for 1,500 shekels per night,” says architect Ron Eyal, a partner at the Giladi Eyal Architects office in Kibbutz Sde Nehemiah. This phenomenon is not exclusive to the Kinneret region. “You see it everywhere in the Galilee, and in the north in general,” he says. “In the Western Galilee, Kfar Hanania, Amnun, Korazim; in the community settlements and also in the kibbutz extensions.”
There are two issues with this, he says.
‘Many homeowners looking for an upgrade, especially those with significant budgets, are not necessarily looking for a sense of community.’
“First, it creates a nuisance for the neighbors, who were seeking quiet and community and instead have found themselves next to a noisy party house. Also many homeowners looking to upgrade to a new home, especially those with significant budgets, are not necessarily looking for the sense of community on the kibbutzim and moshavim, and simply want to live in a single-family home. This often creates tension between longtime residents and people moving for the sense of community, versus those who came to build mansions or with business goals.
“Secondly, the Galilee is losing a lot of people who want to live here and can’t, because they can’t find a home or they can’t afford one. The group of people who can afford to buy or live in the Galilee is way smaller than before. For young couples and families, including people born and raised here, living here is nearly an unattainable dream.”
Not just for the wealthy
“Since the first lockdown, prices have jumped by an average of 30% in all the community settlements in the region,” Scheinfeld says. “A house that cost 2 million shekels at the beginning of the pandemic would now cost at least 3 million shekels. The price increase for empty lots, the most sought-after product in the region, has been even more significant. Plots of half a dunam or more in the Western Galilee region that cost 400,000-500,000 shekels about two years ago now cost at least 1.3-1.4 million shekels. Most of these areas were once found on kibbutz expansions, but now there are almost no such plots left vacant. The few sellers see the competition and the demand, and raise their asking prices accordingly.”
According to Eyal and agents from the area, a similar price increase hit the rental market as well. “Let’s take the Upper Galilee as an example,” says Eyal. “Before the pandemic, people were paying 4,000 shekels a month to rent a four-room, 160-square-meter home on a kibbutz extension. Within a year, the same properties were renting for 8,000-9,000 shekels a month, and there are also single-family homes renting for 12,000-15,000 shekels per month.” Near the Kinneret, single-family homes rent for an average of 8,000-10,000 per month, Shapira says, noting, “Young people aren’t looking at these homes so much. It’s expensive for them.”
Danny Ivri, head of the Misgav local council, agrees, saying, “The price increases of the last two years makes it hard for new families who want to move here and encourages wealthy families from Tel Aviv to build summer homes here.
“In addition, this area has its security and transportation problems, and the fact that even though this is an outlying area, residents receive no tax benefits as they do in other areas considered [to be in] Israel’s periphery. This isn’t good for the communities. It harms the strength of the community, the DNA of the place. We are not interested in being towns full of wealthy mansions, and want a community with children who fill the schools and preschools. This side is cracking.”
Ilan says the Galilee area may have undergone a significant face-lift over the past two years, but that the process started much earlier.
“When my wife and I moved to the area, we lived on Kibbutz Yaron in a home consisting of two adjoining 35-square-meter apartments. It was no villa. At that time, people did not come to Yaron for villas. The kibbutz founders’ homes were also modest. So the belief that a rural community equals a villa equals a high quality of life? I object to that statement. There are many components to quality of life, and statistically and empirically you can find it in the city and not in a rural environment, contrary to what people think. So what happened? The rural areas have weakened. For several decades there was negative migration out of most of the communities in the region. The kibbutz extensions were built as sleepy suburbs, and in many places they didn’t even know how to absorb newcomers. Conflicts and frictions arose. The character of many of these places changed and it weakened them.”