A “Real Estate Center” analysis reveals that in the past seven years, the price of an average four-room apartment in Beit Shemesh has surged by 66.5%, likely due to significant demand among the ultra-Orthodox population and prices that were, until recently, considered relatively low. Conversely, Be’er Sheva has experienced the mildest increase, at 23.5%. And what about Tel Aviv and Jerusalem?
By Doron Breuiman, Nadlan Center
Apartment prices in Israel have been steadily rising for over 15 years. This fact is well-known to anyone living in Israel during this period, offering little novelty. However, over the years, certain cities have experienced sharper increases than others, as evidenced by an analysis of CBS data conducted by the “Real Estate Center.” This analysis compared the average prices of four-room apartments in various major cities recently published to their prices in 2017—the year CBS began its current measurement method. The findings indicate that Beit Shemesh and Bat Yam saw the sharpest price increases for such apartments, while Be’er Sheva and Haifa saw the mildest increases.
The Central Bureau of Statistics (CBS) recently published data on apartment prices in Israel for the third quarter of 2024. The average price of a 3.5-4-room apartment—the most common type in Israel—was 2.2 million shekels. This represents a 5.4% increase compared to the same period last year and a 46.5% increase compared to the annual average in 2017, the earliest year available for comparison due to the previous measurement method used by CBS.
A comprehensive review of the data by the Real Estate Center shows that despite widespread increases across the market and all geographical areas, significant variations exist between cities in terms of the average price increase since 2017. Among major cities with over 100,000 residents featured in the CBS review, Beit Shemesh recorded the highest increase in average four-room apartment prices at 66.4%, followed by Bat Yam at 55.8%.
In the third quarter of 2024, the average price of a four-room apartment in Beit Shemesh was 2.27 million, up from just 1.36 million in 2017—an increase of 905,000 shekels. In Bat Yam, the price of a four-room apartment in 2017 was 1.85 million, compared to 2.88 million in the third quarter of 2024—an increase of 1.03 million shekels.
The cities with the mildest increases were Be’er Sheva and Haifa, both more peripheral among major cities. Be’er Sheva saw a 23.4% increase, with an average four-room apartment price of 1.31 million shekels in the third quarter of 2024. Haifa experienced a 37.2% increase, with an average price of 1.87 million shekels over the same period.
In Tel Aviv, prices rose by 44.1%, slightly below the national average. While the average four-room apartment cost 3.38 million shekels in 2017, its price in the third quarter of this year reached 4.87 million. And in Jerusalem? The average price of a four-room apartment rose by 46.9%, from 2.1 million shekels in 2017 to 3.08 million in the third quarter of 2024.
“Beit Shemesh is currently almost the only city offering housing for the ultra-Orthodox community at reasonable prices. It’s a classic case of supply and demand. If there were sufficient housing for the ultra-Orthodox community in Beitar Illit or Modi’in Illit, you would see an impact on Beit Shemesh and a moderation of its price increases. It’s not just that Beit Shemesh has supply; it’s also that no other location does.”
Inbar Weiss, Former City Engineer of Beit Shemesh:
It should be noted that the comparison was made between the third quarter of 2024—the latest available data—and the annual average for 2017. Since 2024 has not yet concluded, an additional comparison was made between the yearly average of 2017 and 2023. The data shows that even under these conditions, the price increase for apartments in Beit Shemesh between 2017 and 2023 was the highest at 60.7%. However, the second-highest city in this case was not Bat Yam but Rehovot, with an increase of 47.72%.
The only city offering affordable supply for the ultra-Orthodox community
“The primary and most significant reason for the recent price increases in Beit Shemesh is that it is currently almost the only city offering affordable housing for the ultra-Orthodox community,” explains architect Inbar Weiss, who served as Beit Shemesh’s City Engineer during a period of intensive construction (2019–2023). “This is a classic issue of supply and demand. We are discussing high demand from the ultra-Orthodox population, which lacks sufficient options. If Beitar Illit or Modi’in Illit offered enough supply for the ultra-Orthodox sector, it would affect Beit Shemesh and moderate its price increases. It’s not just that Beit Shemesh has a supply; it’s that no other place does. This is what makes Beit Shemesh a hot market.”
According to appraisers Yaniv Rafael and Yehoshua Levi from the Yaniv Rafael Appraisal Firm, which operates in Beit Shemesh, the city is undergoing massive construction, including infrastructure, attracting many people, particularly from the ultra-Orthodox community. “Beit Shemesh has an excellent location. Today, a train line raises apartment prices, connecting Beit Shemesh to Tel Aviv and Jerusalem. This has attracted many ultra-Orthodox people who flocked to the city. Hundreds of apartments were sold in a single day, leading to a crazy surge in demand.”
Rafael and Levi add that Beit Shemesh has also attracted many investors who “simply realized they could buy an apartment in Beit Shemesh for a million shekels, and within a year, it would be worth 1.2 million, and after another year, 1.4 million. Many purchased apartments for investment, taking bank loans, and the prices kept rising. Prices in Jerusalem and Bnei Brak are much higher. Young couples used to live in basement units in Jerusalem, paying 4,000-5,000 shekels in rent. Suddenly, they saw a new neighborhood in Beit Shemesh—developed and youthful—so everyone rushed there.”
Reuven Cohen, another appraiser operating in Beit Shemesh, points to additional factors driving up apartment prices in the city. “On the supply side, there’s a shortage of land. The city sits in the Elah Valley, surrounded by green spaces preventing expansion. On the demand side, there’s very high demand. Those who can’t afford Jerusalem move to Beit Shemesh. The city’s proximity to Jerusalem strengthened both the ultra-Orthodox and Anglo-Saxon communities.
