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  • תמונת הסופר/תAriel Friedman, Adv

The Impact of Government Infrastructure Development on Property Values in Israel

The State of Israel has a multi-year infrastructure development program for 2021-2025 which consists of a list of infrastructure projects whose construction cost exceeds NIS 100 million and whose construction has begun or is expected to begin between 2021 and 2025. According to Israel's Finance Minister Avigdor Lieberman (2022), infrastructure projects worth almost a combined $35 billion will be launched over the next decade. Projects include those in the fields of transportation, energy, water, and government buildings.

Some of the transportation projects currently underway include light-rail projects in Tel Aviv and Beersheba, and a new airport is also in the planning stages. Over $6 billion is allocated to these transportation projects which are currently underway. Another $6 billion is designated for three other transportation projects: a light rail between central and northern Israel, as well as express lanes and building the actual lines for the Tel Aviv Metro². At least $4.5 billion is reserved for large power plants and water desalination plants, and almost $3.5 billion is set aside for government building projects.

In Israel, infrastructure investments have a direct correlation with property values. Enhanced transportation networks, such as new highways and improved public transit systems, not only improve connectivity but also contribute to the desirability of certain areas. According to the Israel Central Bureau of Statistics, the construction of the Tel Aviv Light Rail, a major transportation project, has led to an average 20% increase in property values along its route.

Moreover, investments in public amenities such as parks, schools, and cultural facilities can significantly impact property values. The Israeli Ministry of Housing and Construction reported that properties located near well-maintained parks experienced a 15% increase in value compared to those farther away. Additionally, the presence of high-quality educational institutions and cultural venues can enhance the attractiveness of neighborhoods, leading to higher property values.

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