Drive a few minutes beyond the last rows of Israel’s suburban red-tile roofs and you reach the nahala — a farm estate of 20–50 dunams (5–12.5 acres) anchored by a family home and long-term land lease from the Israel Land Authority. Once considered a sleepy agricultural backwater, these plots have turned into one of the hottest tickets in Israeli real estate, weathering interest-rate hikes, war, and a sluggish housing market without a meaningful price correction.
Over the past decade, average prices in moshavim rose more than 50 percent, jumped again in 2023, and merely plateaued in 2024, even as city apartments slid. Supply is capped at roughly 65,000 estates nationwide, and planning authorities show no sign of releasing more land.
Who is allowed to buy?
By law, each nahala is one agricultural unit; the lease, usually 49 or 99 years, renewable, requires at least nominal farming activity and bars purely commercial projects. Foreign residents may buy only with Planning Administration approval, so the market is dominated by affluent Israelis and diaspora Jews who intend to live here.
Data compiled by Ben-David’s firm shows that foreign buyers closed about 900 estate deals in the first half of 2024, a 70 percent leap year-on-year, worth $11.8 billion. That surge erased the 2022–23 lull and signalled a brisk rebound long before the mortgage market loosened in Israel’s cities.
A recent tweak to National Outline Plan 35 lets owners carve an estate into smaller freehold lots and sell them independently. One couple paid NIS 9 million for a 10-dunam tract in the Mateh Yehuda region, secured permits, split off two half-dunam parcels (each with rights to build three homes), and now expect to sell those pieces for a combined NIS 6 million, while keeping the remaining land for future appreciation.
Multiple revenue streams
Beyond capital gains, owners can lease fields to neighbouring farmers, run guest cottages, host agritourism ventures, or install solar panels, creating income that reduces carrying costs and adds long-term value. “A nahala is not just bricks and soil,” Ben-David said. “It is a way to live in open space and still hold a smart, stable investment.”
Planning authorities warn that virtually no new detached houses will be approved in central Israel for years, so city families seeking space must look outward. At the same time, modest rate cuts and new infrastructure projects are expected to revive rural demand. With supply frozen and versatility rising, Nahalot, quietly, stubbornly, looks set to stay Israel’s most resilient real-estate bet.
The writer is a real estate entrepreneur who advises diaspora investors on rural property in Israel. The views expressed are hers alone.