Prophecy isn’t part of a banker’s toolkit, but even without superhuman foresight, a detailed analysis of the Israeli real estate market indicates a promising outlook. The strong investment potential is primarily driven by the persistent gap between supply and demand – a gap fueled by Israelis’ strong desire to own property and developers’ ongoing inability to build enough housing to meet this demand.
A combination of sociological, cultural, and national factors has created a consistent increase in demand for real estate in Israel – not only for new apartments but for property in general. In addition to the ten million residents within Israel, another eight million Jews worldwide are eligible to immigrate under the Law of Return. This, along with rising antisemitic incidents globally, has heightened interest among Jews seeking secure investments and peace of mind for themselves and their families. Despite security and geopolitical issues in recent years, Israel remains a highly attractive destination for foreign residents.
A small country with limited supply and high demand makes the trend in Israel’s real estate market clear. When combined with the shekel's strength against the dollar, a kind of real estate “paradise” appears – a scenario difficult to ignore. Since the start of the war, the exchange rate has shifted from 3.8 shekels per dollar to 3.3, reflecting both the resilience of Israel’s economy and currency strength.
Even conservative forecasts predict continued strength in the Israeli housing market. Demand from Israelis and foreigners remains high. More young Jews living abroad are considering immigrating and settling in Israel. Many parents are contemplating buying one or two properties in Israel to secure a safe haven for themselves, their children, and even grandchildren. Notably, in some countries, demand for Israeli real estate has tripled over the last two years, and interest from foreign residents continues to grow.
Written in collaboration with Bank Mizrahi-Tefahot
The above is for informational purposes only and does not constitute a loan offer.