Acre, an enchanting and highly touristic city in Israel, is often overlooked when it comes to its real estate prospects, which is unfortunate. Delving into the sales and rental transactions in the city reveals that most properties can yield a return of 4% or even higher. Notably, 2-room apartments, with an average price of just NIS 520,000, boast a potential yield of up to 5%.
Acre’s Prime Location
Acre, known locally as Akko (Hebrew: עַכּוֹ, ʻAkkō) or Akka (Arabic: عكّا, ʻAkkā), is a city in the coastal plain region of the Northern District of Israel.
The city occupies a strategic location, sitting in a natural harbor at the extremity of Haifa Bay on the coast of the Mediterranean’s Levantine Sea. Aside from coastal trading, it was an important waypoint on the region’s coastal road and the road cutting inland along the Jezreel Valley.
Acre was a hugely important city during the Crusades as a maritime foothold on the Mediterranean coast of the southern Levant and was the site of several battles, including the 1189–1191 Siege of Acre and the 1291 Siege of Acre. It was the last stronghold of the Crusaders in the Holy Land prior to that final battle in 1291.
The population of the town was dramatically changed as a result of the 1948 Arab–Israeli War. It had been almost entirely Muslim and Christian until May 1948, when three-quarters of the population fled. It was then resettled by Jewish immigrants. In present-day Israel, the population was 49,614 in 2021, made up of Jews, Muslims, Christians, Druze, and Bahai. In particular, Acre is the holiest city of the Bahai Faith in Israel and receives many pilgrims of that faith every year. Acre is one of Israel’s mixed cities; thirty-two percent of the city’s population is Arab.
Real Estate in Acre
According to data from the YAD2 (Israel’s most popular real estate board) BI system, which draws on YAD2 listings data, like many other cities in Israel, 4-room apartments make up the largest portion of supply (35.2% of all apartments offered), followed closely by 3-room apartments (34.4%). Interestingly, while 4-room apartments are also the most sought-after in the city, accounting for 31.8% of searches, 3-room apartments garner interest from only 23.7% of prospective buyers. Additionally, despite constituting just 4.3% of the total supply of second-hand apartments, 6-room apartments or larger receive an extraordinary 13.7% share of searches.
The supply of apartments in Acre has remained relatively stable over the last year. On average, 455 second-hand apartments were offered for sale each month in December 2021 and the first quarter of 2022, with the number decreasing slightly to 415 apartments in May. Notably, the Kiryat Wolfson neighborhood boasts the highest supply of second-hand apartments, with over 250 units listed for sale in the past year.
One possible explanation for the demand for 6-room apartments could be their relatively affordable average price of around 2.1 million, considerably lower than the prices in central Israel or even cities within the Haifa metropolitan area. On the other hand, the most sought-after property type, a 4-room apartment, commands an average price of approximately NIS 1.1 million, while the most frequently transacted 3-room apartments have an average price of about NIS 753,000.
Regarding rentals, based on second-hand transactions over the last year, a 3-room apartment typically costs around 2,900 NIS per month, while a 4-room apartment comes at an average monthly rental cost of about 3,700 NIS. Surprisingly, despite lower demand, 2-room apartments offer the highest rental yield, reaching 4.7%.
Taking a comprehensive look at Acre through the Y2 system, the South Beach / New Acre neighborhood stands out with over 3,600 unique searches for apartment purchases on Loch Yad2 in the last year.
In summary, Acre presents an exciting real estate market with significant potential for investors. 4-room apartments dominate both supply and demand, while 6-room apartments offer attractive affordability. As the city continues to draw interest from tourists and homebuyers alike, keeping a close eye on its dynamic real estate trends will undoubtedly be rewarding for those looking to invest in this hidden gem of Israel.
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