"Apartments without a MAMAD are worth 15% less" - truth or myth?

The gap between new apartments and second-hand apartments is widening. Specifically, this concerns apartments built before 1992. This gap has been growing since the war and widened further during the last two confrontations with Iran. There is a prevailing assumption that because people want an apartment with a MAMAD (protected space) and are willing to pay more, prices for apartments without a MAMAD are starting to decline.

We checked whether this assumption aligns with market reality, this time by reviewing the well-known Ahuza neighborhood in Haifa. The survey was conducted by lawyer and real estate appraiser Dr. Asaf Gastfreund. Last week, we published his survey examining the state of the urban renewal market, where he found that most Pinui-Binui (evacuation and construction) projects are on the verge of being shelved, with 50% of participants pessimistic about their completion. The common denominator between both checks is the issue of the MAMAD, which has become critical for many families, especially in Haifa, where about 77% of apartments are not protected.

Ahuza was chosen because it contains a significant stock of both old construction from the 1940s to the 1970s and modern construction, allowing for a comparison within the same local market under identical conditions of location, accessibility, and educational institutions.

Since Tax Authority transaction reports do not specify if an apartment has a MAMAD, Dr. Gastfreund used the year of construction. The law has required a MAMAD in every new apartment since 1992. The study was divided into two periods — before and after the war — to understand the changes in unprotected apartments. The key question was whether the value of a MAMAD increased significantly due to the war, and whether prices for apartments with a MAMAD rose more than those without.

For a fair comparison, the study focused on apartments in the same size range (60-100 sq. m) and only included second-hand transactions. Sales by contractors were excluded as they involve different financial structures. Out of 543 transactions, 198 remained for comparison.

The findings show that the difference between the groups was only one percentage point, which is too small to be significant. In fact, apartments without a MAMAD rose slightly more. Furthermore, the general price gap between new and old apartments remained stable throughout the period and did not widen with the war — the exact opposite of what one would expect if a MAMAD had become significantly more valuable. For comparison, apartment prices in the entire Haifa district rose by about 21% during that period, with both groups rising along with the market.

Regarding claims that apartments with a MAMAD are worth much more, Dr. Gastfreund explains: "In the media and among professionals, premiums of tens of percent in favor of apartments with a MAMAD are sometimes presented. Our data does not contradict them; they simply measure something else. It is possible that an apartment with a MAMAD sells faster, but that is a matter of sales velocity, not the price itself. We checked the price."

Dr. Gastfreund adds: "A new apartment is indeed worth more than an old one, but thanks to the whole package: elevator, parking, maintenance, and construction standards. The MAMAD is just one item in that package and cannot be isolated. Bottom line: in the neighborhood checked, a MAMAD did not cause apartment prices to rise more, not even after the war. Apartments without a MAMAD did not lose value or buyers. It is possible that a MAMAD affects the speed of sale or the rental market, but this research did not examine those factors."