Low demand for housing in 'tourist cities', sales in small cities rising

Apr. 28, 2006 3:59 | Updated Apr. 28, 2006 5:36
Low demand for housing in 'tourist cities'
By DANIEL KENNEMER


In contrast with the global trend, tourist cities in Israel, such as Eilat, Tiberias, Safed and Acre, are not in high demand in the residential market.

"The thousands of Israelis that flood into the resort cities [during Pessah break] apparently enjoy the vacation, but are not at all considering moving to live in those cities, despite the advantages of views, nature, sea, and despite the fact that prices of dwellings there are tens of percentage [points] cheaper than in the central areas," the Contractors Association said Thursday, citing data on sales of new housing units.

Demand for cities popular with tourists in Europe and the US, on the other hand, has been perpetually on the rise, the group noted.

Contractors Association President Aharon Cohen called on the new government to act "urgently" to promote the country's outerlying cities through development of transportation and tourist infrastructures, creation of jobs and encouraging residential purchases.

Cohen attributed the bulk of the blame for the low demand to the government's 2003 decision to cancel financial incentives towards residential purchases in peripheral cities, which he said brought an end to sales. Additionally, the crisis plaguing the tourism sector in recent years reduced the sector's work force, along with the ability of the resort cities to provide a livelihood to prospective residents.

Cohen decried the neglect of Tiberias, as one example.

"The only city on the only lake in Israel, a city with immense historic and religious significance for Christians and Jews. In any other country it would have become a pearl of tourism, a wellspring for tourists and residences [alike]," he said. "The government must handle Tiberias in a focused and intense manner."

Citing data from the Central Bureau of Statistics, the contractors said only 41 new dwellings were sold in Tiberias in 2005 and 40 in 2004, down from 93 in 2003. In Acre, 25 new dwellings were sold in 2005, down from 106 in 2004, while in Nahariya sales fell to 220 in 2005 and 106 in 2004 from 274 in 2003. In Eilat, 83 new units were sold in 2005, 134 in 2004 and 77 in 2003.

Sales of new housing in small cities in central Israel, however, rose over the same period of time, Cohen said, citing the example of Ness Ziona, where 394 new dwellings were sold in 2005, up from 379 in 2004 and 269 in 2003.

Per 1,000 inhabitants, in 2005, about 13.5 new housing units were sold in Ness Ziona; 12.7 in Kiryat Ono; seven in Beit Shemesh, 4.4 in Ashkelon; 4.3 in Petah Tikva; and 4.1 in Nahariya; while 1.5 were sold in Eilat; 1.2 in Safed; 0.9 in Tiberias; 0.5 in Acre; and 0.2 in Kiryat Shmona.