Beit Shemesh has led the number of purchases by the Hareidi sector in recent years, and in Haifa, Haredim purchased one out of every ten apartments sold. While 20 years ago, only 20% of Haredi purchases were made in peripheral areas, today it is 40%. And what statistics predict the “Hazardization” of a locality? A new report by the Haredi Institute for Policy Research reveals the Haredi real estate map.
By Dror Nir Kastel, Nadlan Center
Where have Haredi (ultra-Orthodox) households purchased the most apartments in recent years? Not in Jerusalem and not in Bnei Brak. The somewhat surprising answer to the question is that Beit Shemesh is the queen of purchases in the sector, with 8,602 apartments purchased in the city by Haredim during 2018-2021. Jerusalem is followed by 8,414 apartments, Bnei Brak with 5,663 apartments, Ashdod with 2,777 apartments, and Haifa rounds out the top five most sought-after areas by the ultra-Orthodox sector, with 1,825 apartments purchased during these years.
The data appear in the housing chapter of the report on the state of Haredi society by the Haredi Institute for Policy Research, published for the first time last week. The report is based on data from government sources, with the housing portion updated until 2021.
While the three cities leading the list are cities known to have large Haredi concentrations, the presence of Ashdod, and especially Haifa, is more surprising. According to the information on the Institute’s website, in 2021 alone, 554 apartments were purchased there by the ultra-Orthodox public, about 10% of all the apartments purchased there that year. It should be noted that today, the leading cities in terms of the number of ultra-Orthodox residents living in them are, in order, Jerusalem, Bnei Brak, Beit Shemesh, Modi’in Ilit, and Beitar Illit.
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According to economist Dr. Eitan Regev, the Institute’s Chief Data Officer, who led the study, “Haifa is not a city with a very large Haredi community, but there is an influx of Haredi buyers, in our assessment at this stage, for investment. What is happening is that young Haredim cannot always afford apartments in places where they want to live, and they would rather hammer a nail into the real estate market than lose their turn. The ultra-Orthodox are buying many more apartments for investment, and most of these investors don’t have another apartment, so they live in a rental and rent out their investment apartment.”
According to Regev, in the Haifa, North, and South districts, between 60 and 70 percent of Haredim’s purchases were for investment. “Many times, it starts as an investment, but having no choice due to the high rental prices, in the end, the buyers occupy the apartment themselves. And as soon as the ultra-Orthodox community grows to a sufficient mass, they populate the apartments they bought for investment at an increased rate.”
According to Regev, the Haredi community is more established in Ashdod. “Ashdod is the southwestern border of the ultra-Orthodox triangle: Jerusalem, Bnei Brak, Ashdod, where, including Modi’in Illit and Beitar Illit, 80% of the ultra-Orthodox population in Israel lives.”
Movement of ultra-Orthodox buyers from the central region to the periphery
Another means of examining trends in “Haredization,” or hithardut in Hebrew, besides home purchases, is examining data from the education system in each city. “In Ofakim, for example, the percentage of Haredim out of all students in 2000 was 27%, and in 2023 it was 51%. In Beit Shemesh, it was 27% twenty years ago and over 73% in 2023.” Other cities where more than 50% of pupils are Haredi as of 2023 are Safed (62.7%) and Netivot (62.4%). In Migdal HaEmek, Kiryat Malachi, and Hazor Haglilit, the percentage of Haredim in educational institutions stands at over 40%.
The report also shows that while in the early 2000s (1998-2001), the Haredi public’s home purchases were concentrated in the central and Tel Aviv districts, with 35% of all purchases concentrated in this area over the past two decades, the share of purchases in these areas has dropped to only about 20%, apparently due to a significant increase in home prices in the area. “At the same time, during these years, there has been a movement of Haredi buyers from the central region to the southern and northern periphery,” the report states, “between 1998 and 2001, about 20% of all apartments purchased by Haredim were purchased in the Southern, Northern, and Haifa districts. 20 years later, the prevalence of purchases in these areas has doubled, and about 40% of the apartments purchased by Haredim in 2018-2021 are located in these districts.”
The average price of an apartment purchased by a Haredi person – 75% of the price of an apartment purchased by a non-Haredi
The report explains that due to the socioeconomic situation of the Haredi public, Haredim are willing to purchase older and smaller apartments than those purchased in general society: “The housing shortage has also affected housing characteristics in Haredi society, and in recent years there has been a broader trend of purchasing apartments for young Haredi couples in the periphery, with an emphasis on the Haifa area and northern Israel. Nonetheless, departure from Haredi cities and satellite cities is contingent on the existence of social and community institutions compatible with the characteristics of Haredi society, particularly the particular stream to which housing buyers belong. For this reason, Haredi housing purchases in the periphery are concentrated in Haifa, Afula, and Nof HaGalil, where Haredi community infrastructures have been established in recent years.”
According to the report, Haredim made do with apartments with a median area of 80 square meters in 2021, compared to 97 square meters in the non-Haredi Jewish sector. The number of rooms is smaller – an average of 4 rooms in the non-Haredi Jewish sector compared to 3.7 rooms among Haredim. These preferences also affect the price of an apartment: an average of NIS 1.39 million was paid by an ultra-Orthodox family in 2021, compared with NIS 1.85 million in the non-Haredi Jewish sector. In other words, the average price of an apartment purchased by an ultra-Orthodox family is 75% of the price of an apartment purchased by a non-Haredi Jewish buyer – this is a fairly stable ratio that continues over the years, with small movements here or there.
The price of apartments is also explained by the seniority of the apartments: the median age of an apartment purchased by Haredim in 2021 was 29 years. Among non-Haredi Jews, on the other hand, the median apartment age was only 15 years this year. In other words, in 2021, the apartments purchased by Haredim were twice as old as those purchased by non-Haredi Jews. These gaps did not exist at the turn of the century. Between 1999 and 2004, the ages of purchased apartments were very similar in both groups, so Haredi apartments were also newer.
Regev says, “The housing data are administrative data received from government ministries in delay. What makes our data unique is that we can identify – both at the seller and buyer levels – whether he is ultra-Orthodox, with the help of a machine learning-based algorithm based on a lot of details about the person: at what age he got married, where he lived, where he studied, how many children he has, and more.”
Do you see an impact on housing prices when a neighborhood becomes ultra-Orthodox?
“There are two opposing forces at work because the more Haredim there are, the more attractive the neighborhood becomes to Haredim and less attractive to those who don’t. The power of rising demand is stronger because it increases the rate of entry into the neighborhood, and the population itself has a higher natural growth rate. For example, in Netivot, the critical mass of the population has also led to economic development, such as power centers and commercial centers that have opened, and this also raises real estate prices.”
