The Iron Swords War has updated the price tag attached to each type of existing protective shelter in the market, ranging from neighborhood shelters in decades-old housing complexes to the Mamad, which has been mandatory since the early 1990s. Appraisals conducted during the war revealed gaps that could reach tens of percent.
By Dror Nir Castel, Nadlan Center
In recent times, as we are often required in Israel to enter protected spaces every few days—or even hours—the choice of whether to do so at home in an accessible Mamad or to descend several floors to crowd with neighbors in a shared shelter significantly impacts our quality of life. This is before considering the less appealing options of neighborhood shelters or simply stairwells. Thus, amid various impacts on the real estate sector, the Iron Swords War has heightened the importance of protection in residential units. In the rental market and properties for sale, apartments with a Mamad have become more sought after, naturally affecting their prices.
Current forms of protection in residential areas are diverse and largely depend on the year the building was constructed. In the 1950s, neighborhood shelters began to be built as a common form of protection. Since 1969, shelters in residential buildings or shared complexes have been mandatory. These were later joined by floor-protected (shared) spaces created in the 1970s and 1980s for convenience, primarily serving office buildings but tall residential buildings lacking Mamads. The latest development is the construction of Mamads, which became mandatory due to building standards established in 1991 following the Gulf War.
Real estate appraiser Yochai Shterit addressed the pricing of apartments based on their level of protection based on transactions conducted in Kiryat Motzkin and Kiryat Bialik over the past six months. “In general, the level of protection reflects the age of the building, and often the neighborhood as well. An apartment in a low-rise building from the 1960s will cost about 20% less than an apartment with a (private) Mamad. A mid-age apartment, around 40 years old, with a shelter in the building will cost about 7% less than one with a Mamad. Of course, each transaction should be assessed individually based on the apartment’s size, location, and various factors such as maintenance level, balcony, etc. However, in today’s market, where nearly every apartment in Israel faces a threat, it is reasonable to expect to see future additions of Mamads to existing apartments, and the price gaps between apartments with and without Mamads are likely to increase.”
According to Shterit’s sample from transactions in the Kiriyot, an apartment with a Mamak (a protected space shared by all residents on the building floor) costs approximately 1.35 million shekels, the estimated price of an apartment with a shelter in the building. In contrast, an apartment with a Mamad rises to 1.45 million shekels, while an apartment without protection costs about 1.15 million.
There is no price difference when a Mamak is sufficient
On the other hand, appraiser Anat Barnir Shternberg from Barnir Real Estate Appraisal did not find a significant difference in prices between apartments with a Mamad and those with a Mamak. Still, she did identify notable price disparities between these two types of apartments without a Mamad or shelter.
Barnir Shternberg’s office examined transactions for 3 to 5-room apartments in northern Rehovot over the past year. The results showed a gap in transactions between apartments with a Mamad and those without, but with a shelter in the building. For 3-room apartments, a gap of about 18% was observed; for 4-room apartments, a gap of about 19%; and for 5-room apartments, a gap of about 20%. However, no gaps were observed between 4-room apartments with a Mamak and those with a Mamad.
Real estate appraiser Yochai Shterit noted, “An apartment in a low-rise building from the 1960s will cost about 20% less than one with a Mamad. A mid-age apartment with a shelter in the building will cost about 7% less than one with a Mamad. It seems that in today’s market, where almost every apartment in Israel is under threat, it’s reasonable to expect to see future additions of Mamads to existing apartments, and the price gaps between those with Mamads and those without are likely to grow.”
“An apartment in a low-rise building from the 1960s will cost about 20% less than one with a Mamad. A mid-age apartment with a shelter in the building will cost about 7% less than one with a Mamad. It seems that in today’s market, where almost every apartment in Israel is under threat, it’s reasonable to expect to see future additions of Mamads to existing apartments, and the price gaps between those with Mamads and those without are likely to grow.”
Real estate appraiser, Yochai Shterit
She added, “In Israel, there is a real and pressing need for sufficient and quality protected spaces, both in terms of location and size. This need creates a buyer market focused on protected spaces. This is evident when analyzing residential property transactions. I found significant disparities in the prices of second-hand apartments between those with Mamads and those without, even when a shelter exists in the building. However, I found that the market does not pay a different price when there is a sufficient Memak in terms of its location and size compared to a Mamad. Beyond the price disparities, an apartment without adequate protection will face difficulties in selling.”
She noted that identifying price gaps between older apartments with shelters versus those without can be challenging: “This is likely because buildings without any protected spaces are often old buildings currently in an accelerated process of urban renewal, or at least there is an expectation from buyers for such renewal, which increases the value of the properties without reflecting the true gap between apartments with or without shelters. However, when analyzing rental prices for such apartments, a gap of 10%-15% can be seen between buildings without shelters and those with them.”
October 7 turned everything upside down
Another aspect already addressed by the Real Estate Center is alternative protection solutions implemented when a Mamad is not feasible. Ran Naor, CEO of Ortec, based in Kibbutz Karmiya near Gaza, a company specializing in improving protection in existing buildings and facilities for 17 years, claims that regarding apartment prices and demand, there are no differences between a protected room approved by the Home Front Command and a Mamad: “Our buyers, including foreign investors, want protection, regardless of the type, as long as the Home Front Command approves it. You can’t distinguish between a Mamad and enhanced protection from the buyer’s perspective. They see it as buying a house with protection, so it doesn’t matter whether it’s a Mamad or enhanced protection.”
He added, “October 7 turned everything upside down. Even among young buyers, one of the main questions is whether there is protection. If there’s no protection, demand and the rental price drop. Many buyers won’t even show interest if there’s no protection. For those living in a building with many units, where it’s impossible to build a Mamad, there aren’t many options besides this type of protection.”