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With Israel’s economy booming, and restrictions on purchasing property in Israel now relaxed, the prospect of investing in “The Startup Nation” has many a savvy investor crunching the numbers on the Israel property market. What makes Israel property such a phenomenal purchase in 2015?
Israel’s economy has seen an influx of foreign investment eager to take advantage of the wealth of up and coming tech companies, with everyone from Facebook to Google investing heavily in the nation’s talent. This investment continues to grow, with the latest figures (Q4, 2013) seeing Israel receiving a record-high $7.22 billion in foreign capital inflow. This is driving salaries up, yet at the same time there is not enough property available to meet demand.
Israel’s population is growing at a rate of almost 2% per year, and there are simply not enough properties to fulfil this demand. Property developers are racing to get a slice of this pie. As there is significant demand for new properties and a growing average salary, it is considered that despite Israel’s current boom in property there will be no harsh correction as seen in some other markets, instead there will be a future gradual slowdown of price rises as supply meets demand. This makes Israel property one of the safest options for long-term investment with a healthy return.
If there’s one investment that’s been resilient, it is property in Israel. At the end of the last decade the entire world was seeing significant turmoil, a global financial meltdown and Israel, like many other countries, was experiencing domestic political unrest. But even during this turbulent time, property prices saw a 22.35% rise in 2009 and 17.04% rise in 2010, according to Israel’s Central Bureau of Statistics. These changes are dramatic, and property prices have continued to rise year-on-year at a stable and sustainable rate.
Those investing in property in Israel are typically seeing greater yearly returns that those investing on the stock market. Indeed, the stock market has become a dangerous place to invest one’s funds with its unprecedented volatility over the past few years. For many investors, Israel property is instead the ‘safe bet’, with rental returns of 5% a year easily attainable, and properties available at low cost.
With this in mind, the best time to invest in a property in Israel is now, while demand continues to be strong.
