A golden opportunity has arisen for foreign buyers to purchase homes in Israel. A window has opened that may not last very long. Let’s take a deeper dive into what is going on in Israel to understand this.
Let’s start with the state of Israel’s real estate market. The term the Israelis use is “Al HaPanim”, or in a nutshell, the worst market in 20 years. Demand is significantly down since two years ago. Interest rates are high, high-tech has crashed and the judicial reform protest movement wreaked havoc across the country. The latest Gaza war hasn’t helped the situation either. Apartment prices have actually done the unthinkable; they’ve gone down!
The US dollar by contrast has risen to heights not seen for over 15 years. It’s trading around 4 NIS to the dollar. In November 2021 it traded at 3.10 NIS to the dollar, which is over a 30% increase.
That means if for example your budget is $1 million, two years ago you could buy an apartment for 3.1 million NIS. Today you can afford, for the same money, to purchase an apartment for close to 4 million NIS. Moreover while back then demand outpaced supply by a wide margin, today you can have the pick of the litter.
So now that we’ve established that today is an ideal time to buy an apartment, let’s understand why this opportunity may not last.
Let’s start with the supply side of the market. Due to the Gaza war the Arab workforce hasn’t been barred from construction sites in most of the country. Work on new development has ground to a halt. High interest rates and inflation are having negative pressures on new construction projects.
At the moment with little demand, the lack of supply is not causing any upward pressure on pricing. However as the country comes out of the war, interest rates stabilize, and the economy starts moving again, lack of supply will become a key driver of price increases.
Furthermore the dollar is a precarious position worldwide and may not continue to carry the same purchasing power it has at the moment.
To sum up why today is the time for foreigners to purchase homes in Israel. Prices are down and the dollar is up. Six months to a year down the road we may see the reverse and the dream will have slipped away.
For more info or for specific opportunites contact David Weiser at 516-690-6106 or whatsapp