A car fire started by a Gazan rocket 311.
(photo credit: REUTERS)
The unsettled security situation in the south caught the real estate market at a
bad time: a freeze that has lasted for several months, combined with the protest
movement. This reality again raised the question whether the security situation
affects housing demand and prices. Since the latest clashes are too fresh to
draw any conclusions, “Globes” examined previous confrontations.
assault on the Gaza Strip, Operation Cast Lead, lasted from December 2008
through January 18, 2009. Euro Israel Development and Investment Ltd. builds
homes in the south.
CEO Ofra Hadad told “Globes,” “People sold in a
panic, lowering asking prices by tens of thousands of shekels, especially in
Sderot and Ashkelon, because there seemed to be no solution to the situation.
Buyers at that time profited later.” Hadad says that once Operation Cast Lead
was over, it took time for the real estate market to recover.
Ben-Shahar and Dr. Yuval Arbel of the Technion Israel Institute of
Technology’s Center for Urban and Regional Studies, Dr. Yosef Toubul of the
Jerusalem College of Technology, and Prof. Stuart Gabrial of UCLA’s Ziman
Center for Real Estate carried out a study to see whether the security situation
affects home prices.
Their findings do not support Hadad’s
The study examined the effect of firing on the southern
Jerusalem neighborhood of Gilo on home prices there. Between October 2000 and
April 2003, Gilo was frequently hit by fire from Beit Jala in the Palestinian
Authority. Some apartments were at direct risk, while apartments that were not
in the line of fire were nonetheless affected by the conditions.
study found that prices for apartments in the direct line of fire were 8% lower
than similar apartments in the neighborhood.
The study also found that
home prices in the entire neighborhood, and not only for apartments in the line
of fire, fell by 10%, and only recovered two years after calm was
Ben-Shahar told “Globes” that, at the peak of the shooting,
apartment prices fell by 17%.
“The riskier areas took longer to recover.
Prices recovered 14 months after the shooting stopped.”
believes that the results of his study are applicable, and that cities such as
Beersheba, Ashkelon, and Ashdod, which take fewer hits from rockets, need less
time to return to routine, including home prices. Prices in towns with more
incidents, such as Sderot, need more time to recover.