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War and economic uncertainty drive Israelis to purchase new homes at unprecedented rates.
Despite a year marked by war, missiles, and the ever-present wail of sirens, the real estate market is flourishing, with citizens flocking to purchase homes – particularly new units from developers.
This growth in the property sector, especially in new home sales, may be unparalleled since the post-COVID surge.
What’s fuelling this demand amid ongoing turmoil? And while it may seem like a golden age for developers, is the reality as rosy beneath the surface?
According to the Central Bureau of Statistics, 22,670 apartments were sold between April and June 2024, a 38% increase compared to last year. Of these apartments, 46.4% were new units – a stark rise from previous years when new apartments accounted for only 25% of total sales.
A senior Real Estate Specialist, explains this shift.
“The data shows Israelis are voting with their feet, purchasing significantly more apartments than last year, especially new ones, thanks to incentives from developers and attractive financing terms,”. “Buyers are offered the option of paying 10-20% now and settling the balance upon occupancy. Developers needing construction cash are even offering bridge loans with interest covered, making it highly accessible.”
This demand for real estate reflects the public’s perception of long-term stability.
“The Israeli real estate market is seen as safe and dependable, even in turbulent times. Apart from a brief period between 1965 and 1985 when prices dropped, real estate has shown consistent growth. There are years with modest 1–3% increases, while others, like 2022, saw gains of up to 20%. For Israelis, real estate remains one of the most stable investments.”
He also notes the cultural dimension, as a home in Israel symbolizes security in uncertain times.
“There’s a deep-rooted attachment to homeownership here. For many, having a home offers peace of mind, especially during existential fears. Even though recent events have shattered this perception of security for some, the yearning for a safe space persists. Concerns over recession, possible tax hikes, and banking stability are prompting people to put their money into something tangible – bricks and mortar. With future taxes and inflation fears looming, real estate feels like the safest investment. Moreover, developer incentives have made real estate more accessible than ever”.
“Payment terms have become extremely favorable. Buyers can secure a property with a minimal initial payment, with the balance due at occupancy, usually in three to five years. These terms were once rare, but now developers compete to offer flexibility,” he said.
“Of course, this means they’re taking on some risk – if a buyer can’t follow through, the developer may repossess and resell the property, generally with a 10% cancellation fee.”
Political instability and the impact on real estate
The country’s political situation, paired with a year-long conflict, is also influencing real estate trends. Prolonged war, deepening social divides, and recent credit downgrades are prompting many Israelis to buy homes domestically and abroad. While some Israelis see purchasing property locally as an investment in security, others are temporarily relocating.
Emigration has surged by over 40% compared to the previous year, largely driven by political and security concerns and rising social polarization.
Yet, amid uncertainty, the real estate market continues to thrive, bolstered by a cultural drive for stability and developers’ strategic adjustments.
Whether this boom will endure or adjust with the war’s progression remains an open question, but the demand for four walls and a secure home persists for now.
The content of this article is designed to provide the reader with general information and not to serve as legal or other professional advice for a particular transaction
