Neighborhood watch: The market’s looking up in the South

Dimona is one of the northeastern Negev region’s development towns, created in 1955 when the first 35 North African families were brought at night to what was then an empty tract of desert.

Today it has a population of approximately 40,000. It is rapidly developing into a modern town able to offer its residents commercial, cultural and educational amenities, and the real-estate market is taking off.

As with other development towns, when Dimona was created in the early ’50s, the planners had two aims in mind: to create a presence in an area that had so far been completely empty, and to create a workforce for the Dead Sea industrial area.

For many years, Dimona was, to put it mildly, very underdeveloped economically and culturally, and its educational and health services were inadequate. The real-estate scene reflected this state of affairs. The early residents were housed in what would be described today as small cramped dwellings with basic facilities. It was a backwater in the fullest sense of the word, a Third World city in a country that even then considered itself a developed Western democracy.

Now all this has changed, and very little of the old, underdeveloped, isolated desert town remains.

The town has been undergoing a process of change for the past 20 years. One of the country’s most important research installations, the Dimona nuclear facility, is located southeast of the town, and about 20 years ago the chief scientist in the Industry and Trade Ministry established a technology incubator in Dimona.

The vast majority of the employees in these institutions do not live in Dimona, but they have a bearing on the gradual de - velopment of the town.

As a result of the upgrade the town has undergone – which accelerated in 2004, when mayor Meir Cohen took office – de - mand for real estate is growing and prices are going up.

Current Mayor Benny Biton tells Metro that the upgrade process has been further accelerating in the past two years, with 900 new homes in progress and another 3,200 planned. What has caused the real-estate market to spring to life like this? “It is all a question of quality of life,” he says. “The quality of life in Dimona has increased dramatically during the past few years, and residents are now happy to live in the city. As a result, I have reason to believe that most of the residents are pleased with their city and the way it is being administered.”

Among the amenities the city offers, he says, “we now have our own theater and cinematheque and other cultural activities.... We have a shopping mall where residents can make most of their purchases without having to travel all the way to Beersheba to buy fashionable clothes, and we now have a medical center that has doctors 24 hours a day and provides medical facilities and services that until recently were only available in Beersheba.

In addition, we have one of the best educational systems in the country.”

As such, he states, “young men and women have no reason to leave the city, [and] many who left in the past are com - ing back.”

In addition to all that, the area has an excellent climate, as it is 600 meters above sea level.

Dimona may be a better place to live than it was in its first years of life, but that is not the only reason for the recent upsurge in demand. There is also demand among investors.

In the past, the real-estate market in Dimona was stagnant and prices were accord - ingly low. Prices of NIS 200,000 or less for a three-room apartment were the norm. As a result of the Bank of Israel’s fiscal policy and the historically low interest rates, many small investors transferred their money from low-yielding bank deposits and saving schemes, to brick and mortar.

Lior Balul, the energetic manager-proprietor of the Re/Max real-estate brokerage, tells Metro that “during 2010, real-estate investor demand was very strong, and over 50% of all real estate transactions were from investors. At those times, you 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 percent. Today the yields are lower, but at some 6% per annum, [they] are still substantial. A four-room apartment in a good area costs approximately NIS 500,000; it generates an annual NIS 30,000 in rent, which adds up to an annual yield of 6%.”

And high rental yields are not the only thing bringing investors to the real estate market. The military is also influencing the trend.

The IDF has been transferring all its training and educational facilities to the Negev, and this will mean transferring some 10,000 to 20,000 army personnel, who are mostly family men, to the area.

Some of them will end up in Dimona.

What kind of accommodations will they find there? Most of the housing in Dimona was built by either the Jewish Agency or the Construction and Housing Ministry to accommodate the new immigrants. Many of these homes have been renovated to add more space or beautify the façade. Dimona also has single-family homes and semidetached houses. Some, built by the Jewish Agency as far back as the ’50s, have large plots, and most of these have been renovated. There is also the Bnei Beitcha option, whereby people who intend to live in Dimona buy land and then build their own homes.

The prices of these homes when they reach the market can be NIS 1.8 million or more – while at the other end of the spectrum, a three-room, 75-square-meter apartment in one of the more down-market areas of Dimona can cost only NIS 320,000.

Neighborhood watch: The market’s looking up in the South

With improved health and educational services and increased real-estate prices, Dimona’s star is on the rise.