Foreigners in the real estate market of Israel

In recent years, there has been a noticeable decline in foreign investors' interest in purchasing real estate in Israel compared to the previous decade. Before the financial crisis of 2007-2008, the annual number of transactions was around 6,000 to 7,000, but in recent years this figure has decreased to 4,000 to 5,000. The main buyers remain clients from North America, the UK, and France. The share of foreign buyers accounts for only 4% of the total transaction volume in the Israeli real estate market. However, the value of the properties they purchase often reaches several million dollars, which significantly impacts the real estate and construction sector.

Preferences of foreign investors

Foreign investors typically choose premium properties, among which are:

• penthouses and apartments with a sea view in Tel Aviv,
• mansions in the German colony of Jerusalem,
• housing in Herzliya Pituach,
• more affordable housing along the Mediterranean coast.

The publication Themarker highlighted several cities and areas where foreigners are most actively purchasing real estate.

Tel Aviv: a center for foreign investment

Tel Aviv, renowned for its stunning sea views, beaches, and vibrant nightlife, ranks among the top destinations for foreign real estate investments in Israel. The so-called "Golden Mile" stands out in particular. Many buyers see this city as an option for a second home, with the intention of moving here permanently in the future.

Housing prices in Tel Aviv

In Tel Aviv, there is a wide range of housing options available. For example, small one-bedroom apartments in old buildings by the sea can be purchased at the following prices:

• from 1.8 million shekels (about 520 thousand dollars) to 2.5 million shekels (approximately 725 thousand dollars).

The cost of housing depends on various factors, such as the condition of the apartment, its location, the views from the windows, and the availability of parking and elevators. The most expensive apartments in the country are located right by the sea. Luxury housing is offered in projects like David Promenade, 10 Herbert Samuel, and Sea One.

Real estate for wealthy clients

This year, Canadian billionaire Sylvan Adams, who has Jewish roots, purchased an apartment in the 10 Herbert Samuel project for 110–120 million shekels (32–35 million dollars). There are also apartments with an area of 200 square meters and a 30 square meter balcony, priced between 17 and 20 million shekels (approximately 5–6 million dollars).

Buyers with plans for the future

As Samuel Van Cote, a realtor at Neot Shiran, a luxury real estate agency, notes, "Most of the apartments are purchased by buyers who are still living abroad for business, but have close ties to Israel and plan to immigrate here in the coming years."

Jerusalem as an object of interest

Jerusalem, with its unique cultural heritage and diverse entertainment options, also attracts many foreign investors in real estate.

Foreigners arriving in Jerusalem seek to experience the uniqueness of this city rather than just being in an ordinary place. According to Eli Teperberg from Teperberg Real Estate, typical elite housing with standard design will not catch their attention. He recently participated in the sale of a $6 million home owned by an Israeli living abroad. This 300-square-meter penthouse, featuring five bedrooms and two balconies, has recently been renovated and is located on Rabbi Akiva Street, occupying the top three floors of an 18-story building with elevators, a gym, and a sauna.

Residential Complex

Most residents of the neighborhood are Americans, Britons and French, among them representatives of foreign media. The most expensive apartment in Jerusalem was sold to Russian businessman Leonid Nevzlin for 40 million shekels ($11.6 million) in the Waldorf Astoria residence.

In Herzliya, there are many options for those dreaming of seaside real estate. One of the most luxurious areas here is Galey Tchelet Street. A house was sold here in 2005 for $21 million, and a few years later, it was resold for double that amount. However, there are also more affordable options; for example, apartments further from the shore can be purchased for 40% less than properties on the coast.

Real estate in Netanya

Netanya is another popular resort city located north of Herzliya. Property prices here increase closer to the sea. The Nice Boulevard area is particularly attractive, where you can buy an apartment with an ocean view and a view of the synagogue.

French preferences

The French prefer to live near the old city center, where there are many cafes and restaurants serving French cuisine. A complex of serviced apartments is currently under construction here, which is already in high demand.

Real estate in Bat Yam

In Bat Yam, a city south of Tel Aviv, you can also find affordable real estate that matches in comfort and quality. If you plan to come for a vacation, a small apartment would be suitable, but for a family intending to emigrate, more spacious housing will be necessary.

Conclusion

In summary of my research on the trends of foreign real estate purchases in Israel, I concluded that despite a decrease in the number of transactions compared to the pre-crisis period, foreign buyers still have a significant impact on the real estate market in the country. Their demand is focused on prestigious properties in Tel Aviv, Jerusalem, and Herzliya, where they prefer to acquire luxury apartments and mansions, often with a sea view.

Tel Aviv: the center of attraction

Tel Aviv, with its vibrant atmosphere and coastal location, remains the most attractive for foreigners, offering a wide selection of luxury apartments in projects like David Promenade and Sea One.

Jerusalem: a unique historical context

Jerusalem, with its rich history and culture, also attracts buyers from abroad looking for unique and historically significant properties.

Herzliya: prestige and luxury

Herzliya, thanks to its status as a prestigious seaside town, offers luxurious mansions and apartments that compete in price and quality with the best offerings in Tel Aviv.

Key points

• Foreigners make up only4%from the total number of real estate transactions in Israel.
• Their contribution to the construction market and the development of luxury real estate is quite significant.
• Tel Aviv, Jerusalem and Herzliya remain the most popular destinations for foreign buyers.

In conclusion, I would like to note that while the number of transactions involving foreigners may fluctuate, their interest in Israeli real estate remains stable, particularly regarding unique and prestigious properties. This indicates that Israel is still viewed as an attractive destination for real estate investment and secondary residence for wealthy individuals from around the world.