With Israel’s war on Iran’s weapons programs and the nascent ceasefire with the Iranian regime making headlines around the world — along with the war against Hamas still dragging on — many people are wondering if now is still a good time to buy property in Israel. Wouldn’t it be better to just wait out the ongoing war in Gaza and make sure the Iranian ceasefire really holds?
Israel’s residents are resilient, driven, and optimistic–and the economy is no different. Surprisingly, Israel’s stock market is performing amazingly well despite the war. The TA-125 index has risen about 8% since the onset of the conflict with Iran. Investors appear optimistic, possibly betting on Israel’s military strength and anticipating quick post-war recovery.
Meanwhile, Fitch Ratings has maintained Israel's current credit rating, stating it can absorb the impact of the war at this stage. And the country’s real estate index has also experienced some sharp increases as well, rising as much as 6.45% in a single day–the day the war with Iran broke out. Israel also recently achieved third place in StartupBlink’s Global Startup Ecosystem Index, which maps thousands of startups, coworking spaces, accelerators, and influential organizations.
S&P’s chief rater for Israel, Maxim Rybnikov, meanwhile said about our economy: “If you were to present only Israel's economic data, and remove the country's name from the data, it's very hard to imagine that these numbers are coming from a country that is in this security situation. It's pretty amazing." Making these remarks several weeks ago at the Eli Horowitz Conference on Economics and Society in Jerusalem, he added that the main strength of the Israeli economy is that it is "innovative and resilient."
If that isn’t a vote of confidence, I don’t know what is.
And yet, we’re still at war, which means stalled construction starts and little progress on existing projects, a worsening labor shortage, and a chronic housing deficiency. Foreign buyers can’t necessarily travel here and bankers and many other professionals are not working at full capacity. What’s going to happen the day after?
Historical Trends
Since the State’s establishment in 1948, two wars have posed existential threats to the country: the Six Day War (1967) and the Yom Kippur War (1973). According to the Central Bureau of Statistics, one year after the Six Day War, housing prices rose by 6%. By 1969, just two years later, they rose 14%. After the Yom Kippur War, the Israeli economy was in ruins — and yet, a year later, in 1974, housing prices skyrocketed by 39%. In 1975, they increased another 28%.
Those wars signify the start of a pattern. Throughout Israel’s more recent military conflicts — the First Lebanon War, the Gulf War, and the Hamas conflicts of the past 15 years — the trend continued. One notable exception was directly after the Second Lebanon War, when prices dropped by about 1.6%. But just two years after the war, prices increased by 7%.
Even in the Gaza Envelope communities, which have suffered from rocket fire for years, prices have swelled over 300% since 2008. In 2008 in Sderot, for example, the average property sold for NIS 267,000; today, the Tax Authority values those same properties at NIS 1.5 million. Not only that, there are waiting lists for them.
According to reports, a recent Sderot machir lemishtaken project (a government initiative providing reduced-cost housing to first-time Israeli homebuyers) attracted a whopping 17,575 applicants for only 42 available apartments. Sderot’s population has grown by over 1,000 since the end of 2023. This pattern is also evident in other Hamas rocket-range cities, including Ashkelon, Netivot, and Be’er Sheva.
Current Market Dynamics
Property values in Israel have shown consistent resilience and growth, even during periods of conflict. Wars in Israel are not catalysts for price drops. It often seems that nothing is. Following the Covid-19 pandemic, for example, Israeli real estate prices rose an estimated 15-20% in some locations.
That’s why my advice to potential property buyers is always that it’s better to buy something than nothing—and to do it sooner than later. In my 20 years in the industry, the main regret I’ve seen buyers feel is not buyer’s remorse. It’s disappointment in not having purchased earlier. If I got a dollar every time I heard someone lament, “If only I’d bought 20 years ago…” I could probably buy another property myself!
Don’t wait another 20 years. Don’t wait until the wars are over. Do it now.
If you can’t yet afford an apartment in Jerusalem, maybe you can purchase an investment in Bat Yam or Tzefat. Or maybe you can buy a small place that can be rented out as a vacation property. With this, you can establish a foothold and, when your investment grows, sell and buy something bigger, in a better location, or closer to your ideal.
Present Trends
Israel’s housing market has experienced notable changes during the conflict with Hamas, with the housing price index rising nearly 5% and apartment sales between April and June 2024 increasing by 38% compared to 2023. Construction delays caused by worker shortages are expected to further influence market trends, potentially driving prices even higher.
These shifts in the housing market coincide with a rising interest in aliyah, especially as historical trends show increased immigration following conflicts. In response, The Jerusalem Post has expanded its aliyah portal to provide comprehensive resources for prospective olim. Collaborating with real estate advocacy firm The Getter Group, the portal offers updated guidance on housing, investment opportunities, and local property markets across Israel.
As part of this effort, an educational webinar series has been launched to help participants navigate Israel’s real estate landscape. The webinars highlight investment hotspots, Anglo communities, and emerging locales, providing tailored advice for buyers.
Looking Ahead
The Jewish people’s greeting, greatest desire, and eternal prayer is shalom, peace. Until that peace comes, many people look for an external sense of security, often purchasing property in Israel as a form of insurance (or assurance) for the future.
Whether you’re already a citizen and you want to buy something to live in or invest in, or you’re outside of Israel and looking to buy something to hold onto for your aliyah or retirement, the opportunity to realize your dream and to secure your place in the Land of Israel is as relevant now as ever before. The Israeli real estate market has been–and remains–stable, dependable, and consistently growing. And the shekel is only strengthening on the dollar.
But don’t wait for tangible security to secure your place. In Israel the time has always been now.
To learn more about how we bridge the way home for foreign buyers and olim, visit thegettergroup.com, or contact +1.732.806.0816.
The article was written in cooperation with The Getter Group.