From third world to first class

With a population of approximately 40,000, Dimona is rapidly developing into a modern city offering its residents commercial, cultural and educational amenities.

Dimona  (photo credit: Courtesy)
(photo credit: Courtesy)
Development towns are urban entities created in the Fifties to house new immigrants, mostly from Middle Eastern countries. The olim were dumped there to create a workforce for the new industrial complexes popping up in various areas of Israel.
Dimona, located in the north-eastern Negev region, was one of these entities.
Today, it has a population of approximately 40,000 and is rapidly developing into a modern city able to offer its residents commercial, cultural and educational amenities.
Its real-estate market, too, is taking off.
When Dimona was created, its planners had two aims in mind: to create a “presence” in an area which, up to then, had been completely empty; and to supply workers for the Dead Sea industrial area.
For many years, Dimona was – to put it mildly – underdeveloped, economically and culturally. Its educational and health services were poor, and this was reflected on the real-estate scene, which consisted of residential blocks built to a very low standard.
All this has changed. Very little of the old, underdeveloped backward and isolated desert town remains.
Dimona has, in fact, been undergoing a process of change for the past 20 years. One of the country’s most important scientific institutions, the Dimona Nuclear Facility, is located southeast of the town. About 15 years ago, the chief scientist in the Industry and Trade Ministry established a technology incubator in Dimona.
While the vast majority of these institutions’ employees do not live in Dimona, they have had an influence on its gradual development.
And as a consequence of this gradual upgrading, accelerated in 2004 when incumbent mayor Meir Cohen took office, the demand for real estate is growing and prices are going up.
To a question about why the real-estate market has sprung to life, the mayor replied: “During the past seven years, this administration has made it its business to increase quality of life in the city. As a result, I have reason to believe that most residents are pleased with their city and the way it is being administered.
“We now have our own theater and cinematheque and other cultural activities that generate intellectual pursuits. We have a shopping mall where residents can buy most of what they need without having to travel all the way to Beersheba to buy, for example, fashionable clothes.
“We have a medical center where doctors are available 24 hours a day. It provides medical facilities and services which, until recently, were only available in Beersheba. In addition, we have one of the best education systems in the country.
“Under these circumstances, young men and women have no reason to leave the city. Indeed, many who left are now coming back.
“You ask the reason for the increased demand in housing: It is because people want to live in Dimona. We now have a strong sense of ‘local patriotism.’” Dimona may now be a better place to live in, but that is only part of the reason for the growing demand for housing and increase in real-estate prices.
The recent upsurge can be explained by a combination of the effects of a high quality of life and investment demand.
In the past, Dimona’s real-estate market was stagnant and prices were accordingly low. Prices of NIS 200,000 and less for a three-room apartment were the norm.
As a consequence of the fiscal policy of the Bank of Israel and the historically low interest rates, many small investors transferred their money from very low-yielding bank deposits and saving schemes to brick and mortar.
Lior Balul, the energetic manager-proprietor of the RE/MAX realestate brokerage agency, told Metro: “During 2010, investor demand was very strong – over 50 percent. An investor could buy a three- or four-room apartment in a run-down area for NIS 200,000, rent it for NIS 18,000 a year and get an annual yield of 9%. Today, the yields are less, but still substantial. A four-room apartment in a good area costs approximately NIS 450,000 and generates an annual NIS 30,000 in rent, adding up to an annual yield of 6%.”
The lure of high-rental yields is not the only thing bringing investors to the real-estate market. The military is also influencing the trend, transferring all its training and educational facilities and bases to the Negev, which means some 10,000 to 20,000 regular army personnel, mostly family men, coming to the area. Some of them will end up in Dimona.
But what kind of accommodation will they find there? Most of the housing in Dimona was built either by the Jewish Agency or the Construction and Housing Ministry for new immigrants.
Many of these buildings have been upgraded by adding more space, beautifying their façades, and so on.
Dimona also has single-family homes, as well as semidetached houses. Some were built by the Jewish Agency as far back as the ’50s.
They are on large plots, and most have been upgraded.
There is also what is called Bnei Beitcha (“Build your home”), a scheme whereby land is sold to those who intend to make their homes in Dimona and on which they can build those homes. Their prices, when they reach the market, can reach as much as NIS 1 million, or even more.
Recently, a palatial residence with a swimming pool sold for NIS 1.65m., while at the other end of the spectrum, a three-room, 75- square-meter apartment in one of Dimona’s less desirable areas went for NIS 280,000.