August 2015 (click to enlarge)
Investment property in Ashkelon
Ashkelon is a superb area in which to invest for maximum return. Whether existing housing or new projects under construction, you simply cannot match the value per dollar available in Ashkelon versus anywhere else in Israel.
the last frontier by the sea
When I decided to make aliyah I knew that I wanted to live near the sea but was put off by the astronomical prices of real estate in the center of the country. Undeterred, I set out to find affordable seaside property by starting my search at the extremes of Israel's Mediterranean coast: Nahariya and Ashkelon. At the time both cities were roughly the same size and real estate prices were comparable and affordable. I found the problem with Nahariya to be its isolation in the extreme north and distance from Tel Aviv and Jerusalem. I opted for Ashkelon. In hindsight, I chose wisely indeed.
I still laugh when I hear Israelis refer to Ashkelon as being located in the country's "periphery". The drive to Tel Aviv is less than an hour. If you don't feel like driving there's a train every thirty minutes. The drive time to my brother's house in southern Jerusalem is an hour and ten minutes door to door.
When I moved to Ashkelon in 2011 the major freeway connecting Ashkelon to Tel Aviv, Highway 4, was two lanes in each direction. It has since been expanded to three as far south as Ashdod. Ashkelon currently has one train station. A second one has been approved for construction, along with a third access road to Highway 4 to serve new neighborhoods under construction in the north of the city.
Ashkelon is the only city in Israel with vacant seaside lots under development. It is one of the few cities with undeveloped lots available in the city's interior. Approved plans for new neighborhoods and infrastructure in the north and south of the city will nearly double Ashkelon's population. The days when Ashkelon was considered a little insignificant fishing village on the periphery are at an end. The time to invest is now.
Plans for the future
The following announcement appeared on the facebook page of Ashkelon's mayor on 10 August 2015 (translation by yours truly):
"We are approaching the next giant step towards signing an historic agreement for Asheklon, a blockbuster deal for the construction of in excess of 30,000 new residential units in our city, in the new neighborhoods of Agamim ("Lakes") in the south, Ir Yamim ("City by the Sea") overlooking the sea in the north and Ir HaYayin ("City of Wine") which will be built in the east of the city. The agreement should transform Ashkelon into the sixth largest city in Israel with a population in excess of of 250,000 residents and the new neighborhoods of Agamim, Ir Yamim and Ir HaYayin into the largest and most beautiful neighborhoods in Israel. I shall condition the signing of this agreement upon the Government's preliminary committment to pave a new northern access road into Asheklon, two new freeway interchanges at Ben Gurion and Yitzhak Rabin Boulevards and the granting of Government incentives for factories and businesses to choose to invest in an industrial park and hi-tech park which will be established along the eastern edge of Ir HaYayin and the State's committment to advance plans for urban renewal in the city's established neighborhoods in order to narrow the gaps between the old and new neighborhoods."
bubble? what bubble?
Real estate in Israel has seen an almost frightening inflation over the past decade. When I arrived in Israel as a new oleh I decided to wait "for the bubble to burst" before buying. Price inflation spurred much talk of a commodity price bubble in the real estate market. After waiting three years for the burst that never came I finally decided to buy. I had sold my home in Virginia when the market was still reeling from the collapse of 2008 and I was left holding dollars stuck at 3.4 to the shekel. When the dollar began to climb against the shekel my decison was made.
I bought a 110 square meter (plus 10 sqare meter balcony) apartment in a new neighborhood near the beach. Three bedrooms, two full baths, 1.1 million shekels. Beat that anywhere else in Israel.
In preparing material for this website I went to the new project under construction in the south called "Agamim" ("Lakes"). The last people to build on this site were the Crusaders. I wanted some shots of the cranes and trucks building a brand new neighborhood out of the sand, like Tel Aviv in the 1920s. I arrived to find many of the apartment buildings already occupied. The streets are unpaved. There is no bus service yet. No stores, no schools. The people living there bought their units "on plans" before construction in order to get a discount. They figure its worth waiting a couple years for the infrastrcture to be completed in order to get an affordable flat. That is how strong the demand for residential housing is in Israel. I walked into a contractor's sales office with a client to inquire about availability and was told that all of their buildings currenty under construction are completely sold out except for the garden apartments and penthouse units.
I no longer believe in the bubble theory. It is my opinion that in the absence of a general, protracted economic recession residential housing prices may stabilize but will not burst as they did in North America following the 2008 financial meltdown.