The Israeli real estate market is attracting more and more buyers
Last March, the Israeli government eliminated the tax on the purchase of additional housing, which immediately increased interest in local properties. Only in March 2021 were sold 13,200 units of real estate, which is 26% more than was recorded during the same period in 2020. Experts note that, above all, the Israeli market is obliged to such a rush of investors. They bought 2,500 apartments, up 114% more than before.
Activity has also increased among first-time home buyers. Last month, 6,600 young families bought apartments, a record high for the Israeli market since 2017.
Investors responded positively to the elimination of the additional property purchase tax, which had been in effect in the country since 2015. Business owners accounted for 14% of second-home owners, while 9% were retirees. Twenty percent of this category of buyers had pensions but continued to work – such as military or police officers – and 38% were employees of government agencies. Interestingly, only 9% of additional homeowners were high-tech workers.
The average cost of an apartment in Tel Aviv and its surroundings is 570 thousand dollars, and in the central area – 560 thousand dollars. In Jerusalem, the price of housing is about 400 thousand dollars, in the southern part of the country a little less – 395 thousand dollars, and in the north – 380 thousand dollars.
Interest has also grown from foreign investors, among whom the Americans stand out. They are actively considering options to buy houses on the Mediterranean coast. And the U.S. citizens did not stop even the closed borders, and they made deals through Zoom. The largest acquisition in 2020 was the apartment worth $25.2 million, which acquired a married couple from the United States.
Foreign investors prefer real estate that is located on the waterfront or in close proximity to the sea. Such excitement has caused the rise in price of properties on the first line in Tel Aviv. Demand is growing regularly, while supply is limited because there is little room for new construction on the coast.
Among foreigners who want to have an apartment in Israel, there are both young people and seniors. The first category of buyers are attracted by the modern urban infrastructure, and the latter – the warm climate and the sea.
In addition to Tel Aviv, Jerusalem, Netanya and Ashkelon are popular with investors from other countries.
Real estate requirements have also changed. If buyers previously preferred apartments with 2-3 rooms, now they want apartments with 4,5,6 rooms. Many people are considering buying property in Israel, not only as a place to rest, but also as a primary residence.