Light rail boosts Jaffa home prices

While Tel Aviv is seeing a fall in the number of deals and apartment prices, a different picture is now emerging in Jaffa. The historic port city is experiencing strong demand, and according to real estate agents, prices are even rising in certain areas. The growing interest is attributed, among other things, to the operation of the light rail Red Line which has connected Jaffa directly to the heart of Tel Aviv.

The opening of the Red Line in August 2023, after a delay of about a decade, has brought about a significant change in public transport in the entire Tel Aviv metropolitan region and in Jaffa in particular. The line, which connects Bat Yam, Tel Aviv, Ramat Gan, Bnei Brak and Petah Tikva, has turned Jaffa into a central and much more accessible transit point.

“We began to see the increase in demand for apartments in Jaffa during the Covid period in the midst of work on the Red Line,” says Talya Bar, owner and partner of RE/MAX Advantage Jaffa real estate agency. “Even then, we saw an influx of large contractors like Acro and Hagag. Those companies understood that the opening of the Red Line would lead to the migration of people from central and northern Tel Aviv, as they were given the opportunity to pay lower prices than Tel Aviv and move around easily.”

Bar says that buyers in Jaffa are very diverse, both in terms of age and in terms of the purpose of the purchase. “The growing interest in Jaffa came from several directions. There are foreign investors who are discovering the potential in the city, and also young people who want to live in Jaffa and can find apartments that are slated for urban renewal projects at attractive prices.

Alongside this, we see a great many elderly Jerusalemites who are interested in moving home to Jaffa,” says Bar, explaining that Jerusalem and Jaffa share similar characteristics as ancient cities that attract many interested buyers from the capital of Israel. “The proximity to the sea and Tel Aviv, along with the opening of the Red Line, which completely upgrades the city’s transport capacity, attracts many retirees here,” she explains.

Another real estate agent who works in Jaffa is Omri Kakoon of the Harova agency. He agrees with Bar and says that the rise in prices is felt mainly in north Jaffa. “The northern part of the city has undergone a significant facelift, both in terms of how it looks and population.”

He says the rise in apartment prices in Tel Aviv has led to an influx of customers who are getting the quality of life they aspire to in Tel Aviv, at lower prices. “The rise in prices in the north of the city has also raised the quality of the population in the area.”

Increase in the number of urban renewal projects

According to Tel Aviv-Yafo Municipality data, the significant change in the number of permits received for urban renewal projects came with the opening of the Red Line in the city. Thus, between 2020 and 2022, no building permits were issued for any projects in Jaffa, and in 2023 only one building permit was issued. In 2024 six permits were issued, and as of August 2025, three additional building permits were issued in the city, for a total of 234 housing units.

One of the new projects in Jaffa is the Young Tel Aviv-Jaffa project, by the Hagag Group, on Sahron Street. The project, which is currently under construction, includes two 14-floor towers with 123 housing units, and covers 3,175 square meters. Hagag reported in its financial report for the second quarter that 34 contracts have been signed in the project so far, and that the average price per square meter is NIS 33,849.

Another project of interest in the city is the GO YAFO project. Acro won an Israel Land Authority tender with Ashdar to build 412 homes and commercial space on a 9 dunam (2.25 acre) lot, which was formerly the Maccabi Jaffa soccer stadium. The plan was approved in 2017 for 160 dunam (40 acres) between Heinrich Heine Street to the east, Nahal Sorek Street to the south, Nes Goyim Street to the north, and Gaza and Beersheva Streets to the west. 65% of the area is owned by the state and the rest by Tel Aviv-Yafo Municipality. After many delays, 1,460 homes will be built on the site, half of which will be in government subsidized projects, 48% of which will be for Tel Aviv residents including 30 for Jaffa residents, and 10 apartments for public housing residents.

Alongside housing projects, Tel Aviv-Yafo Municipality has begun building the first community center country club of its kind in Jaffa in 2023 – Beit Cherner, with five swimming pools, a spa, a gym and studio rooms, an auditorium, a gym and more, which is scheduled to open in 2026.

Depending on the neighborhood: a wide range of prices

When it comes to prices in the city, Bar says that the range is very wide, depending on the different neighborhoods. “In northern Jaffa – in the area of the flea market, Noga theater and the American Colony, prices can reach 45-50,000 per square meter, similar to prices in central Tel Aviv,” she explains.

However, Bar says that her office is also seeing an increase in demand in less attractive neighborhoods in Jaffa, which are scheduled to undergo future urban renewal, or are located near urban renewal projects. Bar gives an example of a deal that was recently signed in Jaffa D on Nardor Street. This is a 52 square meter, three-room, fourth floor apartment (without an elevator) with a monthly rent of NIS 4,300. The apartment is in the process of being demolished and rebuilt and was sold a month ago for NIS 1.82 million.

At the same time, Bar mentions another deal in the Tzahalon neighborhood on Tzihatli Street, where a 120 square meters, five rooms mini-penthouse with a storage room, two parking spaces and a balcony, was sold a few weeks ago for NIS 5.5 million.

Kakkon says that in north Jaffa, high demand also leads to certain deals closing above market price. He mentions a deal that was recently closed in north Jaffa at 6 Rabbi Tanchum Street (the Rova complex), which is near the flea market. A 62 square meter, 2.5-room apartment with a basement, and 20 square meters of balconies, a storage room, and two parking spaces was sold for NIS 3.8 million – above the market price. “Demand for the apartment was very high and in the end there were two buyers who were interested in closing the deal. One of them offered a higher price than the market price and our client closed with him,” he says.

Another deal he mentions is in the Eliphelet 26 project (the Ikea project) in the American colony on the border with Florentin. “This is a new project, with a gym, pool and security guard in the building. The 62 square meter apartment that was sold has two rooms, a 14-square-meter balcony, and includes parking. The apartment was sold at the beginning of the month at a record price in the complex, for NIS 3.9 million.

“There are quite a few opportunities hidden in the city”

Another agent in Bar’s office at RE/MAX, Kamal Abu Dahoud, who specializes in the Ajami neighborhood in Jaffa, explains that high interest rates have weighed on some of the city’s mortgage borrowers. “We are indeed witnessing a wave of demand in Jaffa, and part of it is also related to the potential that buyers recognize due to the relatively attractive prices for the area,” he explains.

In the old Ajami neighborhood, for example, which is near the beach, a large 180 square meter garden apartment in a listed building with an 80 square meter yard is up for sale. According to an appraiser’s estimate, the apartment is worth NIS 4 million, but only NIS 3.5 million is being asked.

“The gap between the asking price and the price estimated by the appraiser is very large, we’re talking about NIS 20,000 + per square meter,” says Abu Dahoud. “It’s very difficult to find such deals in Jaffa, but there are apartment owners who are forced to lower prices due to high interest rates, after mortgage payments have risen greatly.”

Abu Dahoud’s believes that one day Jaffa will be “One of the most expensive cities in the world,” and he estimates that the wave of interest stems from the recognition of the long-term potential for profit in the future.

Published by Globes, Israel business news – en.globes.co.il – on September 11, 2025.

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