Tens of thousands of immigrants to Israel: How will this impact the housing market?

It's official now, the Jews are coming: On Wednesday, August 28th, an international conference was held at the ZOA House in Tel Aviv by Real Estate Media in collaboration with Leumi Mortgages. The conference examined the readiness of the state and the construction industry in Israel to absorb the large wave of Jewish immigration from around the world, against the backdrop of war and rising antisemitism. The event was hosted by real estate commentator and editor Ofer Petersburg.

'There’s a sense that something significant is coming, and we are preparing for it.'

After a welcome reception and mingling, the professional part of the event was opened by CPA Uri Yunisi, Head of the Mortgage Division at Bank Leumi, who presented a fascinating overview of Israel’s real estate and mortgage market, addressing the country’s readiness for the mass influx of new immigrants in recent years.'On my way here, I was thinking about what’s happening in our country. War in Gaza, in Lebanon, hostages, high school strikes, the construction industry in crisis—all this while we’re on the verge of a massive immigration wave. At Bank Leumi, we feel the impact, with numerous inquiries from entire communities arriving and wanting to start new lives together here in Israel. These communities are buying buildings, neighborhoods, and entire residential areas. We’re starting to feel that something significant is coming, and we’re preparing for it,' says Yunisi.

'We’re all experiencing the same distress; this shouldn’t stop the government from investing in the economy.'

Right after CPA Uri Yunisi, Raul Srugo, President of the Association of Contractors and Builders in Israel, took the stage to provide background on the construction and housing industry’s preparations for the influx of new immigrants. 'It’s important to remember that human memory is short, and it’s easy for people to forget. If Islamic terrorism occurs in Germany, it doesn’t mean that all Jews there will immediately decide to immigrate to Israel. We need to persuade Jews to come here, and this can be done through benefits and grants. Yes, there are benefits for purchasing a home, but they are only for Israeli residents, not for foreign residents. A Jew living in France who experiences the situation in Paris might consider moving to Israel, but when they look for a home, as long as they are not an Israeli resident, they are considered a foreign investor and pay a high purchase tax of 8-10%. We want to encourage them to invest in Israel, even if they don’t plan to immigrate tomorrow morning, so the government needs to reduce the purchase tax.'

'While there are travel warnings not to come here even as tourists, they are leaving their lives in their countries to immigrate to Israel.'

In the next part of the event, conference host Ofer Petersburg met on stage with Immigration and Absorption Minister Ofir Sofer and Yaakov Hagoel, Chairman of the World Zionist Organization.

Ofer Petersburg: The Minister of Immigration and Absorption is one of the most important roles in the government today, emphasizing the Zionism of Israel in 2024. The weight of the mission is not simple. There are so many tasks, and yours is among the most important. How do you make things happen?

Ofir Sofer: I’m definitely excited about the role I’ve been given, and it’s undoubtedly a significant one in this period. These days, we’re seeing many families and young people in their thirties and forties making aliyah, changing their careers, and moving their lives to Israel. I believe the immigrants are coming mainly out of solidarity and a desire to be part of what’s happening in the country. One immigrant told me in Paris: 'I wasn’t in a Zionist youth movement, but when I saw the images from October 7th, I knew I wanted to be part of my people in these times.' This is a message I hear repeatedly from those interested in making aliyah and new immigrants.

Ofer Petersburg: How does the state assist and encourage new immigrants to come to Israel?

Ofir Sofer: We offer rental assistance of NIS 2,000  for two years in areas like Carmiel, Yokneam, Beersheva, and Ariel. This financial aid covers more than 50% of the monthly rent. We also recently offered a significant tax benefit on purchase for new immigrants. I’ll emphasize that you can buy the property before making aliyah, but to receive the benefit, you must arrive within a year of purchase. Additionally, a massive reform has been made in service and communication with new immigrants. We’ve reduced the bureaucracy in the licensing process and built a support system in coordination with countries, starting with the Jewish Agency, which accompanies immigrants through the absorption process. Many processes have now become digital, and we’ve added private online Hebrew classes. You can start learning Hebrew from the moment your aliyah file is opened. It’s true that more can and should be done, and we’re making efforts in that direction.'

Ofer Petersburg: Yaakov, as of today, what are the plans of the World Zionist Organization to help tens of thousands of immigrants fulfill the Zionist idea and come to Israel?

Yaakov Hagoel: 'On October 7th, a war was declared against the entire Jewish people, not just against the State of Israel. During this time, the global axis of evil launched a campaign that polluted social media with full force, leading us to be shocked to hear that most students in the United States think we are committing genocide. This is something big, and we must remember that these events have affected our sense of security. For our brothers overseas, this feeling has been twice as shaken, which is one of the reasons we are now seeing 30,000 Jews making aliyah. While there are travel warnings not to come here even as tourists, they are leaving their lives in their countries to immigrate to Israel. We have a company called 'Israeli Horizon,' whose role is to encourage aliyah. Right now, we are doing what we did before the war, only it’s easier for us today. We go to the field, inform about rights, point out possible residential areas, and offer housing. You should come too, entrepreneurs, contractors, and marketers—use our platform; it’s open to everyone.'

First Panel: A Global Immigration Wave

As the first panel of the conference began, Moshe Feldmar, Head of Business Development at the Leumi Mortgage Division and the panel moderator, took the stage along with Ran Avidan, CEO of Azorim; Eliyahu Kleinman, CEO of Sparta Group; Shmuel Levy, CEO and owner of Ambassador Group; who joined Ofir Sofer and Yaakov Hagoel, who remained on stage.

Panel moderator Moshe Feldmar began with a message for construction companies: "The more construction companies use mortgages as a tool in selling apartments, as part of their marketing efforts to foreign residents in coordination with the banks, the easier it will be for them to market the apartments. The bank is prepared to tailor mortgage options and make it easier for them to purchase property in Israel in the best and most convenient way."

The floor was then given to Ron Avidan, CEO of Azorim: "For over a year and a half, we’ve been managing a dedicated department aimed at reaching Jews in the diaspora and assisting them in moving to Israel. The concept of 'guidance' is key here because they face many challenges related to language, culture, and complex bureaucracy. We offer a wide range of professionals and advisors ready to help them solve issues in legal, financial, and psychological areas and address the question of whether to immigrate or not. I believe our approach should differ from selling to Israelis. We need to reach out to them, and we are doing so. We reach out to community leaders, participate in meetings that are not just large conferences, and initiate unique meetings to present them with options and ease their natural concerns about relocating."

Eliyahu Kleinman, CEO of Sparta Group, which specializes in marketing real estate to foreign residents, continued with tips for developers on dealing with foreign residents. He said, "Foreign residents are a demanding audience when it comes to information. They want to know everything to feel confident that they are making the right deal. Developers sometimes think that if they decide to target foreign residents, within a month, they’ll have a list of dozens of clients wanting to come to Israel, and another month later, they’ll be signing contracts. It doesn’t work that way. The sales process generally takes longer with foreign residents than with Israeli clients. On the other hand, a survey we conducted shows that the cancellation rates are lower than with Israeli buyers. Therefore, once you give them the time and patience, they will want to buy from you. It’s a high-quality audience."

Shmuel Levy, CEO and owner of Ambassador Group for real estate marketing, added, "In addition to the significant wave of foreign residents immigrating, there is also an interesting phenomenon of returning Israelis. Most of them buy properties close to their existing family in the country, whether in the north or the south. Another phenomenon is the sense of community that we discussed here. We see entire families and communities wanting to live together, purchasing 20-30 apartments in the same area. These two trends are the most important for developers."

Second Panel: Getting Started – Absorbing, Building, and Strengthening Israel

For the second panel of the conference, the stage was taken by Oren Cohen, CEO and owner of Oren Cohen Group, who served as the panel moderator; Shay Falber, Deputy Director of Immigration and Absorption at the Jewish Agency; Chaim Broida, Mayor of Ra'anana; Ronit Almog, Head of Private Banking at Bank Leumi; Mica Klein, CEO of Africa Israel Residences; and Shlomo Elmaleh, Mortgage Advisor and CEO of Eshel Finances.

Panel moderator Oren Cohen, who specializes in marketing luxury properties to foreign residents, began with a brief overview of 30 years of evolution in foreign buyers, from the 1990s to today. He said, "It’s important to understand that foreign residents have a basic suspicion. People have been burned, and it’s hard to restore trust; they’ve heard from others about years of delays in delivery and bureaucratic hurdles in Israel. That’s why we need professionals who know how to talk to them and give them the necessary assurance."

The floor was then given to Chaim Broida, Mayor of Ra'anana. He said, "Ra'anana is experiencing a very positive and interesting immigration of residents coming from all over the world. It’s an important phenomenon, where people understand that the safest place for them is the State of Israel. There are several strong authorities that have taken on the task of absorbing immigrants, and this should be part of top-down government policy. We’ve trained two schools where new immigrants gather to learn Hebrew. I see this as a huge challenge as a mayor, and the entire country needs to prepare for it. My estimation is that there will be significant waves of immigration here, and all parties need to take on this task."

Ronit Almog, Head of Private Banking at Bank Leumi, revealed, "By the end of September, Bank Leumi will launch a website in all languages accessible to immigrants, with details on banking operations. Additionally, we are opening a call center for private banking in all languages – currently, we have over 8 languages available. Our employees are skilled in understanding the mentality of clients, as bankers and mortgage advisors, which is crucial in dealing with the suspicion mentioned here. We are the first bank to undertake such an initiative."

Micha Klein, CEO of Africa Israel Residences, also revealed an initial solution the company offers to foreign buyers: "Foreign residents know they want to come, but are unsure where they will be best off, and this is where we step in to help. We offer an innovative solution where we provide apartments in many areas of the country, allowing foreign clients to purchase an apartment in a specific location and, within a certain time frame, decide to move to another project of the company in a different city, without a penalty. There is urgency here, and we are addressing it."

Shay Falber, Deputy Director of Immigration and Absorption at the Jewish Agency, continued with intriguing data: "If we examine the data on file openers for 2024, we can see that most are young families. There is a clear need for families starting out to find apartments in Israel; in the best cases, they have property in their current location, but often it’s not enough to purchase a home here, especially at the standard of living to which they are accustomed, and therefore more and more families are moving away from central demand areas. We need to remember that we also need to address young families who are not yet financially secure. Alongside pushing events like war and antisemitism, we want to increase attracting events, such as Zionism and housing benefits – one of the most complex challenges for families."

Shlomo Elmaleh, Mortgage Advisor and CEO of Eshel Finances added: "There is a common misconception that all immigrants are millionaires, which is not true. There are immigrants who face financial difficulties, selling what they have at a loss and arriving with less capital than they had. People forget that there are also those who want to move to Israel but cannot afford to buy; they are not included in the statistics. New immigrants are very diverse – from young couples just starting out to retirees. There is much to be done to help them, and among the important issues is the limited financing in Israel, which has not changed for many years – something that is not culturally understood by them. There is a need to open more mortgage options for foreign residents."