Micha Shetrit received the city key from the mayor of Tiberias thanks to the song about the city – “But you want to go to Tiberias alone, want to go to Tiberias on Shabbat, want to go to Tiberias…” This song put Tiberias on the map 23 years ago, but the truth is that Tiberias has been relatively stuck for decades. They talk about the fact that there are no areas in the country, that apartment prices have skyrocketed, that’s true – but it’s not everywhere. In Tiberias, prices have risen modestly, pay attention to the numbers:
An average apartment in Tiberias with an area of 100 square meters costs 880-890 thousand shekels. An average apartment in Israel is close to 2 million shekels. The average price per square meter in Israel is over 20 thousand shekels, in Tiberias it is about 9 thousand shekels. That’s not all – prices in the last five years in Tiberias have increased by a few percent! While in Israel they increased by an average of 30% and in the areas of demand by 50% and more.
It seems that the main reason is that the ultra-Orthodox population in Tiberias is growing. Tiberias is worried, and in areas where the ultra-Orthodox population is growing, apartment prices usually do not rise dramatically. The secular public leaves and compromises on the price. But Tiberias tries to speak to all types of the population and has large private projects alongside projects of a price per inhabitant-apartment on the assumption that they bring a large secular population there as well.
And in general, everyone knows that Tiberias has huge potential – Sea of Galilee, tourism, new projects and yet – it is relatively stuck. The question is whether the price increase will reach it, the question is whether it is a good place to invest?
First, due to the relative stagnation in price increases, there does not seem to be room for a significant loss there, if at all. While across the country the apartments soared and may correct downwards, Tiberias did not participate in the celebration from the beginning. This actually means that when the celebration reaches the north and there, the prices may increase, it is far behind the average increase in the country.
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Besides, for investors, it provides a good return. The rent for an average apartment in Tiberias is NIS 3,000, do the math and you will get a return of 3.5%-4%. So both a good return, and a chance for improvement.
Sample prices from the last six months:
A 4-room apartment on Shimon Peres Street with an area of 124 square meters was recently sold for NIS 1.15 million.
A 3-room apartment on Zion Street in Holol on the fourth floor and in an area of 84 square meters was sold for NIS 530,000.
A 5-room apartment on Golda Meir Street on the third floor and with an area of 154 square meters was sold for NIS 1.476 million.
A 6-room apartment on Hashomer street on the first floor and in an area of 220 square meters was sold for NIS 2 million.
And if you look at Yid2 you will get the same picture – the prices have not moved, the rents express a good return. And you can look at investing in Tiberias from another angle as well. The cost per square meter is NIS 9,000, while in the center of Tel Aviv it already reaches over NIS 50,000 per square meter. But this is an irrelevant comparison. What is more relevant is the cost of construction. Do you agree that it is not possible to buy an apartment at a price lower than its cost?
Well, the construction cost per square meter is at least NIS 5,000, which is a low standard, the average is around NIS 7-8,000 per square meter. The cost of construction is the cost of construction – both in the center and in the north, although the costs in the north are slightly lower (labor) as well as the style and finish of the construction. But given that these are not luxury apartments and luxury towers, the costs should be in the same area.
This means that whoever buys an apartment at NIS 9,000 per square meter actually buys it not much above its construction cost. This means that theoretically the downside is relatively low.
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