People always ask us about where they can invest in real estate and see an increase in their returns. At Creative Estates we are not ‘profit prophets’, but we do keep our eyes and ears open for new developments that suggest which of the more affordable areas of Israel may be ripe for investment.
Lod is a city in central Israel that has been largely neglected until now. It is located just 30 minutes south of Tel Aviv but it has not been attractive to commuters. During the 80s and 90s it was known for violent crime, and it has a delicately balanced demographic make-up of 70% Jewish and 30% Israeli Arab residents. However, recent campaigns to clean up the city have been successful and people are recognizing its potential. Housing prices have been rising rapidly and there are new plans for municipal development.
Lod is traditionally associated with Israel’s first airport, which was known as Lod or Lydda until 1973, when it was renamed in honor of David Ben Gurion. Although the airport is located outside the city boundaries, it remains one of the major employers of Lod residents, together with the many related companies that have grown up around the airport.
What’s New in Lod?
In May 2017, Israel’s Ministry of Finance agreed with the Lod municipality to help build 17,000 housing units in and around the city, as part of a major program of urban renewal. This includes upgrading the transport infrastructure, connecting the eastern and western suburbs to the city center, and including two former moshavim as part of the city.
Community regeneration projects include educational start-ups, a religious ‘garin’ scheme that provides educational support in the city’s schools, and numerous coexistence projects that have helped to ease the tensions between Arab and Jewish residents. The city’s mayor has a clear agenda to upgrade the city and its poor image. For example, when construction workers digging for a new road expansion program discovered a well-preserved mosaic floor dating back to the Roman period, they set up the Lod Community Archaeology Program to engage local students from five Jewish and five Israeli schools in the dig to reveal and restore the mosaic (shown here).
Property Prices in Lod
According to the Madlan website, the price of a typical 4-bedroom apartment in Lod is currently 1.16 million NIS – significantly lower than the national average (1.47 million NIS) and much lower than the average price for Central Israel (1.74 million NIS). Significantly, the Madlan index shows that Lod apartment prices have increased by 50% since 2013. Rental prices in Lod are relatively high, and you can expect a rate of return of between 3.2-3.8% on property rentals, depending on the location and state of your apartment.
So, if you are thinking of investing in an up-and-coming city that is conveniently located in Israel’s lucrative ‘Mercaz’ region, we suggest that you look at Lod. At Creative Estates we would be happy to speak to you about your real estate investment plans and offer you our property management services. Contact us today.