Israel's real estate crisis and the fervor for beachfront property

Leading companies are scrambling to scoop up a new beach plot in Givat Olga, as Israel’s real estate market languishes.

This kurkar cliff appears between Ashkelon and Hadera, and in several sections is located just 10-30 meters from the sea. (photo credit: ITSIK MAROM)
This kurkar cliff appears between Ashkelon and Hadera, and in several sections is located just 10-30 meters from the sea.
(photo credit: ITSIK MAROM)

Israel’s waterfront real estate is in short supply, and it’s about to get even shorter. On Sunday, the Asia Hadera Israel Group published a call for bids for the rights to a plot of approximately 18,500 square meters on the beach of Givat Olga in Hadera.

Like piranhas drawn to an ill-fated cartoon explorer, more than 30 leading companies have already placed bids for a chance to own and develop the rare beach property.

According to Avi Koresh, owner of one of the leading RE/MAX real estate brokerage offices in Hadera, the price per built-up square meter in the city center is about NIS 20,000-25,000, while in areas adjacent to the sea, the price is NIS 35,000.

“Considering a unique opportunity to build on the waterfront, there is a good chance that the plot will be sold at NIS 18,000 per sq.m., which means that the sale will cross the NIS 300 million mark.”

The plot is adjacent to Givat Olga’s bathing beach, Hadera’s sports center and the recreation center of the Committee for the Benefit of Soldiers. It is approved for a variety of applications, as per the zoning plan. Buyers might be expected to utilize the space to establish event halls, commercial businesses, movie theaters, sports or health clubs, game halls, social clubs, training and group activity facilities or even nightclubs.

“Israel’s population growth is the highest among OECD countries, meaning that in order to fill the needs for new households, there needs to be around 55,000 to 60,000 new houses a year, and that needs to be continuous

 Prof. Danny Ben-Shachar from the Coller School of Management at Tel Aviv University
 Olga Beach (credit: Wikimedia Commons) Olga Beach (credit: Wikimedia Commons)

The Asia Hadera Israel Group has also worked out an agreement that would allow the plot to be used for both residential and hotel buildings.

Supply and demand

The rabid interest of potential buyers reflects the current strain on the overall real estate market in Israel. The most prevalent issue in the market is the lack of available housing, which has driven up the cost of residences across the country.

Experts such as Prof. Danny Ben-Shahar from the Coller School of Management at Tel Aviv University have indicated that the pause of new construction – which started during the early pandemic – has led to a significant undersupply of houses.

“[That] there hasn’t been enough housing [is an issue that] starts over time,” he said in June, as dozens of residents across the country began moving into tents in protest of the unreasonable cost of rent. “Israel’s population growth is the highest among OECD countries, meaning that in order to fill the needs for new households, there needs to be around 55,000 to 60,000 new houses a year, and that needs to be continuous. [Housing] is not continuously, stably rising with the needs of the population.”