Investment Opportunities in Israel
Israel’s land is in short supply, with only about 7% available for private ownership. In 2008, Forbes selected Israel as one of the world’s most promising real estate markets. In 2009, after the world’s economic collapse, the Knight Frank Global House Price Index confirmed Israel as the fastest growing real-estate market in the world. Many analysts have noted that both the low interest rates and the banks’ conservative lending policies have led to the vibrancy of the housing market in Israel.1
Investing in property in Israel is without a doubt one of the best investments a Jew can make. For example, six months ago, a three-bedroom apartment in Maaleh Adumim, east of Jerusalem was on the market for $215,000. Today, the price for the same property is $244,000. In Modiin, a fast-growing town between Tel Aviv and Jerusalem, housing prices have risen by about 10% since the beginning of 2009.
As an investment, the cities showing the highest annual rates of return were surprisingly not in the center of the country, where one may expect, such as Tel Aviv, Herzliya and Jerusalem. The most popular were found2 to be in the following cities and areas:
- Tiberias and Kiryat Shmona (up to 10% annual rate of return)
- Be’er Sheva (8% annual rate of return)
- Haifa (6% annual rate of return)
- Ramle and Lod, (around 7.5% annual rate of return)
- Ashkelon, (between 6-10% annual rate of return)
An article in the New York Times (July 14, 2009) stated that even though the pace of property sales in Israel may have slowed down due to the recession, housing prices have generally risen. In addition, the number of people purchasing investment properties has also increased. At the beginning of the decade, between 2,000-3,000 apartments were bought each quarter as investments. That figure rose to between 7,000-8,000 by 2007 and 2008. In Haifa alone purchases of investment apartments doubled in 2007 and 2008, noting the sharpest increase in housing prices year over year (at 9.3% in the first quarter of 2009).
There are no restrictions on purchases of private land in Israel where, anyone, regardless of whether they are a citizen or not, can own land. For more information on how you can invest in property in Israel, contact the Israel Land Fund at email@example.com
Business Week, June 23, 2009
2 TheMarker, March 30, 2009