Leading companies are scrambling to scoop up a new beach plot in Givat Olga, as Israel’s real estate market languishes.
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 in Givat Olga, Hadera.
Like piranhas drawn to an ill-fated cartoon explorer, over 30 leading companies have already closed in on the plot, placing bids for their 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 the city, the price per built-up square meter in the city center is about ILS 20,000-25,000, while in areas adjacent to the sea – the price is ILS 35,000. “Considering a unique opportunity to build on the waterfront, there is a good chance that the plot will be sold at ILS 18,000 per sqm, which means that the sale will cross the ILS 300 million mark.”
The plot is adjacent to Givat Olga’s bathing beach, the city’s sports center and the recreation center of the Committee for the Benefit of Soldiers. It is approved for a variety of applications, 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
As well, Asia Hadera Israel Group has worked out an agreement with the District Committee in Haifa that would allow the plot to be used for both residential and hotel buildings.
Supply and demand
The rabid interest of potential buyers is reflective of the current strained state of 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.
As a primary cause, experts such as Prof. Danny Ben-Shachar from the Coller School of Management at Tel Aviv University have indicated the pause of new construction starts during the early pandemic, which has led to significant undersupply.
“There haven’t been enough housing 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,” he said.