Zichron Yaacov -- Parcels of Land

It was Interesting to note the significant rise in the sale price for plots in Zichron Yaacov based on the results of the Israel Land Administration's (ILA) auction, on plots for residential construction in Givat Eden, that were recently publicized

The ILA has set up a total of 7 plots in Zichron Yaacov: 4 will be for single-family homes (villas) and 3 will two-family homes. Offers to purchase were recieved on these plots, 218 offers in total. The total proceeds  from the winning bids were $1.18 million dollars, with the lowest of the winning bids coming in at $127,000 (including development) and the highest (for a dunam and half plot) coming in at $217,000 (including development). The winning bids averaged at $170,000. 
 

The auction gave a rare opportunity to test out the rise in prices of land in Zichron Yaacov, according in free market conditions (nevertheless this pertains to auctions that are subject to administrative conditions). The last auction for what we call here "ground-attached" homes (or "tzmudei karka") in Zichron Yaacov was approximately 6 years ago in December of 1999.  At that point there were 55 plots of approximately a half dunam and up, for land for building ground-attached homes. The average going price then? "Only" $110,000. The average going price now for a plot of approximately a half dunam for a single family home (and only 4 were available) was $178,000, which is a 62 percent rise in only 6 years, or approximately 10 percent per year, in dollar terms! (In NIS it was a rise of 70%)! The highest price yielded for an individual building plot (including development) was $438,000 a rise of 63% from the last auction which only yielded a highest price of $296,000.

Another interesting thing to point put is the level of demand - in the last auction there were on average 9 bids for every plot available, and 5 plots did not even receive bids at all. At this last auction the plots averaged 31 bids for every plot!

I was not surprised! The demand for homes and plots in Zichron Yaacov and the surrounding areas only grows and increases beyond the supply. Even with the east side of the Moshav building 700 apartments, the trend is still leaning toward a demand in private homes, as in single or two-family homes, and it is not expected for there to be a large supply of these homes in the future The auctions of the Israel Land Administration only emphasized this point when they only offered 7 lots for independent building ("build your own home") of private homes, which was a relatively low number in proportion to the amount of families looking to buy lots for building. When the demand rises and the supply doesn't match the demand it is no wonder that the prices rise.