In Haifa, Israel’s third-largest city on the slopes of Mount Carmel overlooking the Mediterranean, the property market is all about the view.
While Tel Aviv generates a lot of real estate interest as the country’s financial, cultural and high-tech center, Haifa has the beach, mountain air and many global high-tech employers. And the city, which has always been considered Israel’s blue-collar center, is emerging as an important business hub and developing a more playful nature.
“Haifa is unique in terms of real estate,” says Margot Calacuda, a real estate agent with Anglo-Saxon Haifa, a local brokerage. “We have topography, with apartments built up and down the sides of the mountains. So the view and the fantastic air is everything when it comes to finding a place.” The city is built in three tiers. The lower bay area cradles the city’s commercial center; above, the middle tier of Mount Carmel is home to many immigrant communities. But it is the upper tier, known as the Carmel, that is considered most desirable. All three tiers are connected by the Carmelit, one of the smallest subways in the world, with only four cars, six stations and a single 1,800-meter-long tunnel. “Carmel, Carmeliya, Ramat Begin — these are the neighborhoods that are always in demand,” says Calacuda. “If young families can’t afford to stay here, they go to [the nearby suburbs of] Zichron Yaakov and Tivon. In fact, the trend is to stay in smaller flats just to be able to stay in Haifa and in the Carmel.”
Because of its views, the Carmel is Haifa’s main hotel district, where the major four- and five-star hotels are located. Some of those include luxury apartments for residents who want the amenities of a hotel. But the Carmel is primarily a bustling series of neighborhoods, joined by several major boulevards and shopping areas and intersected with winding residential streets lined with flowering trees and modest three- and four-story apartment buildings.
The big demand is for five-room apartments with a porch or a garden, says broker Moshe Cohen, “but there’s not much available in that realm,” he says. “They’re also expensive, at around half a million dollars.”
Still, prices for apartments in the Carmel are considerably cheaper than those of comparable apartments in the upper-middle-class echelons of Tel Aviv or Jerusalem.
Prices in Haifa overall have never fully recovered from the Palestinian intifada that began in September 2000, or from the war with Hezbollah in Lebanon that lasted through much of the summer of 2006. Moreover, says Calacuda, since 2006, when Haifa was hit by Katyusha rockets from Lebanon, prospective buyers don’t want to buy apartments that lack a security room or bomb shelter; only new buildings have sealed rooms in each apartment.
“There’s been a depression in prices,” says Cohen, who believes the three-year intifada is more to blame than the 2006 war. “The market was already affected when the war struck. There’s been no growth, and it’s been that way since the intifada.”
Prices were perhaps on their way up in 2006, “but the war hit us strong,” adds Calacuda. “So it’s an opportunity to buy in Haifa because prices haven’t gone up yet.”
A typical three-bedroom apartment in the Carmel, without what Calacuda calls the “extras” — balconies, garden or a fantastic view — costs between $180,000 and $200,000. Most buildings are built along the mountain, so if it’s not “accessible” (which means it may have 40 to 100 stairs but no elevator), the price could be reduced by as much as $30,000 to $50,000.
If there is a balcony, garden or a view of the mountain, another $30,000 to $40,000 could be added to the total price.
While there is little new construction in the area, and that has hurt the real estate market, “there’s no reason why people wouldn’t want to live in Haifa; all the high-tech companies are here, and it’s only an hour to Tel Aviv,” says Calacuda, referring to Matam, the veteran Haifa business park that is located at the southern entrance to the city and is home to the Israeli R&D and manufacturing branches of Google, Intel, IBM, Microsoft, Motorola, Amdocs and other companies. “You’d think that this would be the trend.”
Yet the “young kids,” say brokers, want to move to the big city, otherwise known as Tel Aviv. “It used to be the joke that Haifa rolled up its sidewalks at night,” adds Calacuda. “But Moriah Boulevard [in the Carmel] is filled with pubs, and so is the city. There’s a lot more to offer now.”
There’s also another area, Massada Street in the Hadar middle tier, which shows promise in terms of future real estate development, says broker Yoav Etiel, based out of nearby Zichron Yaakov.
Massada Street, with its own Carmelit stop, is considered the “Haifa equivalent to Tel Aviv’s Sheinkin,” says Etiel, referring to the central Tel Aviv street that is popular for its cafes, restaurants, boutiques and galleries. Hadar and Massada are both filled with Bauhaus-designed buildings that require major facelifts, while Massada is dotted with small antique shops and cafés and currently appeals to students and singles.
“Some people are buying apartments that will eventually become something; the question is, “When will that happen on Massada?'” says Calacuda. “For now, they’re owned by landlords who are renting out to students, and they didn’t keep up the area.”
Cohen is also looking at Bat Galim, within the bay area of Haifa, which is within walking distance of the Haifa port and where there has always been talk of development. There’s been particular interest in the area since 2002, when Egged, the country’s main bus company, closed what had been the city’s main station in the neighborhood.
Still, things are quiet in the bay area, and it’s less desirable as a residential neighborhood, says Calacuda. “Young families are not going to the bottom of the city to buy an apartment,” she says. “There’s been a little bit of a trend of people from Tel Aviv buying in Bat Galim, but there’s no real flow of investors. Only if there’s a renewal and a real gentrification will there be serious development.”
Jessica Steinberg is a Jerusalem-based freelance reporter.