Buy now or wait out the war? A real estate perspective

With the North still evacuated some 14 months after the war began, Hezbollah still holding a substantial arsenal, Hamas still active in Gaza, and Judea and Samaria facing daily threats, there is a prolonged sense of uncertainty in Israel. The country has taken a beating, and along with it the economy.

Major credit rating agencies, like Moody’s, have downgraded Israel’s economic stability, citing concerns about the fiscal impact of military actions and damage to economic confidence. Despite this, Israel – particularly its real estate – remains a solid investment.

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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 ended, 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 border 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, but there are also waiting lists for them.

According to reports, a recent machir le’mishtaken project (a government initiative providing reduced-cost housing to first-time Israeli home buyers) in Sderot 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, such as Ashkelon, Netivot, and Beersheba.

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 that it’s always better to buy something than nothing. In my 20 years in the industry, the main regret I’ve seen buyers feel is not buyer’s remorse but 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 war is over. Do it now.If you can’t yet afford an apartment in Jerusalem, perhaps you can purchase an investment in Bat Yam or Safed. 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 ongoing conflict, 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 an increasing interest in aliyah, especially as historical trends show a rise in immigration following conflicts. In response, The Jerusalem Post has expanded its aliyah portal to provide comprehensive resources for prospective olim (new immigrants). Collaborating with the 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 hot spots, Anglo communities, and emerging locales, providing tailored advice for buyers.

Looking ahead, a larger initiative – the Israel Real Estate Expo – scheduled for February in New York and Florida, will bring key insights directly to Jewish communities abroad.

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 Israel and looking to purchase something to hold onto for your aliyah or retirement, the opportunity to realize your dream and 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.But don’t wait for tangible security to secure your place. In Israel, the time has always been now.

Register for The Getter Group’s free webinar series: conference.thegettergroup.com.To hear about Getter’s upcoming real estate expos in New York and Florida: cco@thegettergroup.com.

The writer is the CEO of The Getter Group. This article was written in cooperation with The Getter Group.

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