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Is Real Estate in Israel a good investment?

Israel’s real estate scene has long been considered a reliable investment for many people. To find out why, and whether an investment in the Israeli real estate market is feasible for you, read on.

Could I buy in Israel?

Buying in Israel for the purpose of investment has advantages and disadvantages.


● You are unlikely to lose money. Both sale and rent prices have been going up consistently for several years across the country. In the rare cases where prices stagnate or decrease, it is by a small amount, and usually not for very long – the market tends to sort itself out, increasing the likelihood of economic stability for the homeowner.

● The country is constantly developing, meaning there is always somewhere new to invest. The obvious downside of buying in a country where house prices are already known to be so high is that before getting a return on your investment, you’ll have to pay a lot first. But in fact, peripheral cities, small towns, and up-and-coming residential centers are constantly being developed and improved. This means not only more houses, but also a great potential for growth in prices over time – meaning even those on a limited budget may be empowered to see returns on their investment later in life.

● A chance to be part of the Israeli landscape. Many buyers choose to invest in Israel of all places because they feel a connection to it, whether from a religious, spiritual, national or personal viewpoint. Owning a property is a meaningful way of connecting with Israel’s economy, its development, and its people. Not to mention, some investors buy property knowing they may choose to inhabit it several years down the line – and as property prices are rising, it might be best to start looking now.


● The process of buying can be tricky to navigate without a good estate agent and lawyer on your side

● It may be expensive depending on your status. Foreign buyers have a much higher property tax rate; new immigrants get a discount.

All in all, buying in Israel is feasible for most buyers – it’s only the specifics of where and the identity of the buyer that will depend on the budget. However, you’ll certainly need a knowledgeable professional to guide you through the process.

Does the security situation affect Israeli real estate prices?

Israel’s political climate seems to have very little effect on property prices in most cases.

As an example, the city of Ashkelon, which is relatively close to the Gaza border, has actually become a more popular location in recent years. The city is well-developed and coastal, two key attractors for potential buyers. It’s unsurprising that it’s been rising to investors’ attention.

Jerusalem, although often considered a center of conflict in the international media, is a sought-after city for real estate, with far more looking to buy than there are selling. This applies both in the neighborhoods traditionally considered ‘safe’ in West Jerusalem, and also in many of those close to and over the border. For example, in French Hill, where Hebrew University students often opt to live, rent prices have been crawling up over the past few years.

It, therefore, seems that even the most politically affected cities do not experience a hit to the real estate market.

It also bears saying that living in Israel is mostly secure and safe; the conflict can barely be felt in everyday life in many neighborhoods, cities, and towns. If you’re still worried about the effect on your investment, it’s only a matter of researching these places.

Where is the best place to buy for investors?

As ever, it depends on your budget and what you are able to accommodate. However, right now most of the interest is in peripheral cities.

The urban centers of Tel Aviv, Jaffa, and Jerusalem will always be attractive to buyers and renters, and therefore will always be safe bets for investors. But now that prices in these cities are so high, more and more people are turning to the rapidly developing periphery in the hope of a serious profit margin in a few years.

Consider properties in cities that will be affected by the building of the light rail, which will revolutionize intercity transport and make the periphery better connected than ever. Alternatively, inexpensive coastal cities will offer a Mediterranean way of life to those pushed out of Tel Aviv by soaring prices and overcrowding.

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