The state is distributing dunam-sized plots for 10,000 shekels - and demand is soaring
A new tender in the south allows combat reservists, especially if they are local residents, to receive land at a negligible price. The problem: development costs. How much will it cost them to build a villa and is the deal worth it?
A detached house is a special product that is gradually disappearing from the Israeli landscape. The reason for this is planning: the supply of land in Israel is limited, and the goal of the Planning Headquarters is to significantly reduce the planning of land for detached housing, based on the correct assumption that on the same area, dozens of apartments can be built vertically.
The number of tenders by the Israel Land Authority for building detached houses is also shrinking. We see that the central areas where new neighborhoods are being built with low-rise construction are in the south. In areas like Dimona, Yeruham, Netivot, and Ofakim, one can still find individual tenders. Also in Hiran (which will be called Dror), the state has begun massive marketing of land for only hundreds of thousands of shekels.
The question is what the price is. Unlike in the past, to participate in an Israel Land Authority tender, there is a clear advantage for those who do not own housing and have served in the reserves. If you are not such a person, and certainly if you are not a person without housing, your chances of winning land to build a detached house are zero. This process has started gradually since October 7. More tenders have focused on reserve soldiers, particularly combatants. Those who do not own housing and did not serve had very low chances of winning land.
In the Halmonit neighborhood in Yeruham, such a tender will be held next month. The state will market 131 plots for the construction of 262 housing units. That is, it is a neighborhood where semi-detached cottages will be built. 13 of the plots will be marketed to people with disabilities, 59 plots to combatants who are local residents (i.e., residents of Yeruham), and another 59 plots to combatants who are not local residents.
The chance for the public that is not defined as having a disability or being a combatant to win such a tender is low, because the demand for this tender is expected to be very high, at least according to estimates by the Israel Land Authority. If they register, they will be able to be included in the lottery if there were not enough combatants who requested land at a low price. Each plot is for the construction of a semi-detached house, so it is likely that we will see quite a few combatants who registered for the lottery together with their friends with the goal of building a semi-detached house on a shared plot.
From reviewing the details of the tender, it appears that an average plot will be marketed to combatants at a price of only 5,000-8,000 shekels. These are plots of 700 sqm to a dunam. For example, a dunam plot for two detached houses, with a huge yard area, will be sold at a ridiculous price of 12 thousand shekels for the two registrants, excluding VAT. Where is the problem? As usual, in the development price. The neighborhood is not developed, and as such, the state needs not only to develop the land but also to assemble infrastructure, level the land, and more.
The price is high. From checking the tender conditions, it appears that the average development expenses stand at one million shekels per plot. That is, the cost for a combat reserve soldier's plot will be about half a million shekels. Assuming that building a 170 sqm villa will cost around 11 thousand shekels per sqm, it can be assumed that an average villa, including the development price, will cost around 2.3-2.4 million shekels.
Prices in Yeruham are low, and we found three recent transactions of cottages that are under construction at these prices, around 2.3 million shekels. It should be remembered that unlike purchasing from a contractor, building a detached house includes additional related costs, such as architects, consultants, and fees that the contractor pays for.
Bottom line: Is the price of a detached house low? Definitely yes, certainly compared to the average in Israel. Is it significantly cheaper than Yeruham prices? It is cheaper, but not significantly. Despite what we wrote earlier, most of the detached houses sold in the settlement are not in such a large area, and when it comes to a half-dunam plot, the value of the land should be higher. The chances of combatants who are residents of Yeruham to win this lottery are very high, and it is likely that many of them will apply for the tender. It will be interesting to see if there will be any individual plots left for the public that does not own housing and is not a combatant. We will get the answers at the end of August, when the tender will be closed.
