The state is distributing land for 30 thousand shekels - but there is one condition

Until 5-10 years ago, living in Mitzpe Ramon was not an option for most of the population in Israel, but the jump in housing prices at the beginning of the decade, combined with the accelerated development in the south, caused many to recalculate their path. Now, the state has decided to hold a tender and distribute land almost for free to those who serve in the reserves, and especially to combat soldiers.

Land prices for reservists are very low, hovering around only tens of thousands of shekels. Apparently, there is no reason not to run to the Israel Land Authority tenders, unless you really do not intend to build in this town and understand that within 4-5 years the Authority will take the land back from you and you have wasted a lot of time (and money) while housing prices may have risen in the meantime.

Such a tender, in Mitzpe Ramon, is expected to open next month and end in October. The big question: how much does land cost, what is the development price, and is it worth it.

On the face of it, land prices are very cheap, almost imaginary compared to prices in Israel. The appraiser priced the land at a low price from the start, 300-400 thousand shekels. Today, it is impossible to buy land in Mitzpe Ramon on the free market at this price, even when it comes to small areas in a tender, about 300 sq. m, and especially when it comes to larger areas, over 600 sq. m, with good building rights.

This tender includes 51 plots for building detached houses. Even in these tenders, the chance for those without housing to win land is very low - and it is doubtful that it will happen. People with disabilities will receive 5 plots; combat reservists who are locals - 23 plots; combat reservists from the general public (even those who have an apartment) - 23 plots. Reservists who are not combat soldiers are not supposed to receive a plot, unless there is space left. The next in line, if there are plots left (the chance is very low to zero) are local reservists, active reservists who are not locals, and only at the end the general public.

After we understood that only combat soldiers will likely win the land, we checked the prices. Well, the price of land for combat soldiers without housing - between 20-30 thousand shekels. For a combat soldier who is not without housing - 30-40 thousand shekels. If there were no development costs here, the winners of the land could have earned a lot of money, but here the development element enters - a component that cannot be skipped. The Authority needs to develop the land, pave roads and create infrastructure - and the land buyers have to pay.

Unlike other tenders we have seen, where development costs reach hundreds of thousands of shekels and even more than a million shekels in some cases, the development cost in this tender is low - 300-350 thousand shekels for some of the small plots, 400-450 thousand shekels for larger plots and up to 550-600 thousand shekels for the largest plots.

If you take an average plot of 350-450 thousand shekels, add to it the cost of the land including VAT, you will get the possibility of a great plot at a price of up to half a million shekels. Add to this the construction price, about 2 million shekels including all additions, interest and consultants, and you will get a detached house on a huge plot in Mitzpe Ramon at a price of less than 2.5 million shekels.

One can check and see that in areas like Dimona and Yeruham, for example, they are selling detached houses today at higher starting prices. That is, unlike other plots, this deal is definitely worth it. Recently we saw that the state is marketing such land in Kfar Tavor. Some of the reservists decided not to approach the tender due to the high development costs and cumulatively, after we calculated the cost of an average plot including construction, we reached a price of 3.82 million shekels - a price at which you can purchase a detached house in better areas.