Neve Hadarim Neighborhood Sees 10% Price Drop in Two Years
The Neve Hadarim neighborhood in Rishon LeZion has experienced a consistent decline in property prices over the past two years, with average transaction prices falling by approximately 10%. Data from Madlan indicates that the average sale price in June 2024 was around 2.37 million shekels, down from approximately 2.54 million a year prior and 2.64 million two years ago. The average price per square meter currently stands at about 24,450 shekels.
Neve Hadarim, built about 35 years ago in eastern Rishon LeZion, consists mainly of buildings from the 1980s and 1990s. Despite its green streets, gardens, educational institutions, and proximity to the Rishonim train station and Highway 431, the neighborhood's housing stock is predominantly second-hand, with limited new construction. Urban renewal projects like "Pinui-Binui" and Tama 38 are still in the planning stages.
Recent sales data reveals price variations. A 96-square-meter, four-room apartment sold for 2.65 million shekels (27,604 shekels/sqm), while a 114-square-meter, four-room apartment sold for 2.42 million shekels (21,271 shekels/sqm). A smaller, 42-square-meter two-room apartment sold for 1.57 million shekels (37,380 shekels/sqm), achieving the highest price per square meter due to its size.
Currently, 22 apartments are listed for sale, with asking prices serving as a starting point for negotiation. For instance, a 108-square-meter, four-room apartment is listed for 2.59 million shekels, while a similar-sized unit sold for 2.42 million shekels in May. The price difference between apartments in buildings from the 2000s (around 26,000-28,000 shekels/sqm) and those from the 1980s (around 20,000-21,000 shekels/sqm) highlights a significant gap of about 30%.
The consistent price decrease, sharper than the national trend, is attributed to the aging housing stock lacking features like protected rooms (Mamad) and the need to compete with newer neighborhoods. However, for investors, the neighborhood offers potential, with average rental yields around 3.25%, higher than many areas in Gush Dan. A four-room apartment purchased for 2.4 million shekels, rented for 6,500-7,000 shekels per month, represents a reasonable cash flow deal for the central region.
