The Bubble That Would Not Burst

Predictions that Israeli house prices would fall once the government’s major construction projects hit the market have been proved overly optimistic. Excepting certain areas where the heat has gone out of the expensive housing market – Tel Aviv, Jerusalem, Ra’anana and Herzliya – house prices in Israel have continued to rise by 0.6% since February 2019.

The map of the Israeli real estate market is complex and influenced by many different factors, such as the construction of new public transport networks and population trends. The Kahlon Buyer Fixed Housing Plan led to the accelerated construction of new homes in Kiryat Bialik (a Haifa suburb), Beer Sheva, and the southern towns of Netivot and Dimona, but the demand for housing is stronger elsewhere, where prices are not affected by the increase in supply.

The district index measures changes in house prices in six districts, shows prices remaining stable in Northern Israel and Jerusalem, increasing in the Haifa district by 2.8% and in the south (around Beer Sheva) by 1.3%, and in the Central district (excluding Tel Aviv) by  1.2%, but falling in Tel Aviv by 2.3%.

clthough housing prices fell between late 2017 and early 2018, when investment purchases paused for a few months, the overall trend remains upward. This is driven, as we have said before, by strong demographic growth and Aliyah, as well as confidence in the Israeli economy and incoming investment. Although the overall supply of housing has increased, the new apartments were not built where they were needed. There is still a shortage of housing in Tel Aviv and Jerusalem, in charedi towns and in Arab communities, where there are no plans to build new homes.

Unless the incoming government’s housing policy is radically different from the last, we are unlikely to see a fall in demand or prices in the years ahead. We may see some cooling off of real estate prices in the most sought-after cities, as some of the demand is drawn away by new construction elsewhere. However, while employment continues to draw Israeli families to live where their jobs are, the center of the country will remain the strong beating heart of the Israeli housing market.

If you are interested in investing in property in Central Israel, talk to Shaun Isaacson from Creative Estates Israel about the best locations for buy-to-let investment and home purchase, or if you own a property in Israel already and need a reliable management agent.

New Reporting Requirements for Israel Property Purchasers

A new law will take effect on January 1 that required all Israel property purchasers to report the sources of their capital.

The Israel Tax Authority has introduced a new obligation to report on the sources of financing for all real estate deals from January 1, 2019. This is enshrined in the new Minimizing Use of Cash Law, which is designed to squeeze Israel’s black market by limiting cash transactions, in the hope of increasing tax revenue by an estimated 500 million shekels ($145.7 million) each year.

The new law brings Israel into line with other countries that have limited cash transactions to prevent money laundering. It includes a ban on all cash transactions over 11,000 NIS (approximately $300) for any kind of purchase.

The new reporting obligation on real estate purchasers compels them to report the sources of the finance with which they buy any kind of Israeli real estate, whether domestic or commercial. It applies equally to investors and to home owners purchasing any size of property. They must complete an online form on the Israel Tax Authority website within 6 months of signing a purchase contract, and upload adequate documentation to prove the provenance of the funds. Failure to report their financial resources will incur a fine.

Foreign investors are already required to report on the source of their financing when purchasing property in Israel, so this additional obligation being imposed on all purchasers should not unduly inconvenience overseas buyers.

As a qualified Israeli lawyer and realtor, Shaun Isaacson, CEO of  Creative Estates Israel, is happy to advise on this new law and all other aspects of your Israel property purchase.

Preparing Your Israeli Property for Rain

With the rainy season about to start, here are our top ten tips for preventing any floods, leaks or pipe bursts in your Israel property this winter.

Israeli homes are really designed for the summer, which is generally three times longer than the winter season. Most houses and apartments are built with stone floors, poor insulation and minimal drainage systems, unsuited to coping with sudden rainstorms and even snow in some parts of the country.

At Creative Estates Israel, we have many years of experience in managing holiday homes and rental properties and pre-empting winter crises. From experience we know that all properties, whether tenanted or empty, should always be thoroughly checked at the start of the winter to ensure that they are weather-proof. Here is our checklist.

1) Cleaning Gutters and Drains

Before the first rainfall of the season, make sure that water cannot collect in places where it may cause flooding inside your property, such as window ledges, door sills and air conditioner pipes. Ask your upstairs neighbours to do the same, so that you do not find water leaking through your ceiling from their balcony. Your building manager (Va’ad Bayit) should also clear leaves and garbage from the drains and walkways around the entrances to the building, to prevent flooding and slipping accidents.

2) Checking for Leaks and Cracks

Water can seep through the smallest cracks and will always find the weakest points through which to escape, often causing leaks or dampness in the walls. You may be able to see the marks of damp or mold on the walls or ceilings showing where last winter’s leaks occurred. Persistent dampness during the winter months can cause allergies and breathing difficulties, as well as damaging furniture, furnishings and the building structure. Landlords are expected to protect their properties against leaks and dampness, and they may be held liable for damages caused to their neighbors if they fail to do so.

3) Water Heating Systems

Most residents and tenants only turn on their supplementary electric water heater when the weather turns cloudy and cold. If it has been unused during the summer, it is sensible to check your water heating system before you turn it on for the first time. Boiler systems may be used to power radiators as well as providing a supply of hot water, so you should have both functions checked. Lives can be saved by removing bird’s nests and other blockages from flues, because if the ventilation system is blocked when the boiler is turned on you might cause carbon monoxide poisoning. When calling a maintenance engineer, remember that Israeli boiler systems are known collectively as ‘Yunkers’, named after the original Israeli manufacturer.

4) Central Heating Systems

In apartment buildings, the central heating may be centrally controlled by the management committee, with fixed dates for turning them on and off. Individual apartments may have supplementary air conditioning units or other electric room heaters.

5) Positioning Room Heaters

Put safety first when positioning and using electric room heaters. Keep them out of reach of children and make sure that soft furnishings – curtains, cushions, mattresses and clothes – cannot fall onto them and cause a fire.

6) Adjusting Air Conditioning Units

Many people choose to use wall-mounted air-conditioning units for heating during the summer. If so, it is crucial to adjust the vents so that they point downwards to send warm air circulating around the room. Otherwise the upwards setting that you use for cold air in the summer will just heat your ceiling! Remember to clean the filters too.

7) Adding Window Insulation

Israeli homes have very little insulation, so precious heat can be lost through windows and walls. It may help to check that your trissim (window blinds) close tightly and do not rattle in the wind. Hanging curtains and putting draught-excluders along cracks in walls and under doors can keep help to keep the cold outside and the heat inside.

8) Preparing for Power Cuts

It’s not unusual for the power to go out at any time, so it’s good to prepare emergency back-up systems such as alternative power supplies for important appliances like freezers and computers, emergency lights for stair wells, and supplies of candles and matches. In some areas it is advisable to keep a kerosene heater or other non-electric heating source to keep you warm during extended power outages.

9) Protecting Water Pipes

If your home is in an area where the pipes may freeze, we recommend leaving a tap dripping slowly during very cold periods, to prevent pipe bursts. It’s a good idea to disconnect outdoor watering systems during the winter, to save water and to protect the pipes and connectors from damage.

10) Checking on Empty Properties

If there are empty properties in your building that are not taken care of, all the above problems can spread from their apartment to yours. Leaking pipes that go undetected can cause long-term water damage in other parts of the building. If you know that your neighbours are going away for the winter, recommend that they get a property company to check on their home.

Creative Estates Israel manages properties all over central Israel and we send our maintenance teams to every property to check that everything is ready for winter and stays water-tight. To speak to Creative Estates about checking and managing your property in Israel, contact Shaun@CEIsrael.com

City Center Developments

Israeli property investors are watching with interest the process of approving new residential city center developments on the sites of former bus stations in cities across Israel. Herzliya is the first such city center development to receive planning permission, but others will follow.

Many Israeli cities have relocated their main bus stations, leaving city center sites that are ripe for development. In Herzliya, Nitsba have just received permission to build 400 apartments on the site of the former central bus station. Nitsba is owned by Haim Tsuff, one of Israel’s leading developers, as a subsidiary of the Airport City company and Jerusalem Oil Exploration Ltd. They also own the development rights to 18 other bus stations around Israel, and they are also involved in building a new industrial park in Rosh HaAyin together with 1,200 residential apartments.

Although the central Herzliya bus terminus was closed in 2016, the local planning committee granted initial permission for the site’s development back in 2010, but final permission was only given in July 2018. The new project will be called Herzliya Park and is planned to include a number of towers containing 400 apartments which are expected to cost at least NIS 900,000 per apartment.

The story of this project and the potential development of further city center sites is typical of the many bureaucratic delays that hamper real estate developments in Israel. It may take decades for permission to be granted for the development of the other central bus station sites around the country. While home prices continue to rise, the building of residential apartments in many city-center sites are delayed by the planning process.

At the same time, the process of upgrading much of Israel’s sub-standard housing stock to meet the latest building standards, is also taking longer than expected. The TAMA 38 program was devised to upgrade buildings that stand on concrete stilts to survive potential earthquakes. Uptake of the program by residents has been extremely slow, because of the inconvenience of moving out while your building is renovated. This has held up the building of extra apartments in city centers, and has also left many buildings vulnerable to quakes.

Recent Israeli government programs to manage the demand for new homes have not been matched by any significant increase in the supply of new apartments, particularly in Israel’s most sought-after central cities. Apartment prices remain high, particularly in the Mercaz and Sharon districts. The highest increases in prices in recent months have been recorded in Rehovot, Jerusalem and Netanya.

Investors are watching with interest the process of approving residential developments on the sites of former bus stations, and also the development of new light rail stations across Central Israel. It is important to stay in touch with what is happening and also what may happen in the future, even if it may take time for planning permission to be given, so as to get in on the ground floor of exciting potential developments.

If you are interested in buying property in Israel, or consulting with Creative Estates about the management of your investment property, we would be delighted to help you. You can contact us in complete confidence at contact@CEIsrael.com

Saving Landlords Money

Creative Estates is all about saving landlords money, particularly absentee landlords who do not live in Israel. We can help to reduce landlords’ Israeli tax liability and make successful insurance claims.

One of the issues that many non-Israeli landlords are not aware of is the options that exist for reducing their Israeli tax liability. Since all income earned in Israel is liable to taxation, even a property owner who lives overseas is obligated to file and pay income tax on their rental income. It is crucial to take expert advice on how to take care of this properly, particularly if you want to make sure that you are not taxed twice on the same income – first in Israel and also in your own domicile.

Shaun Isaacson, CEO of Creative Estates Israel, is a qualified lawyer and MBA who understands all the ins and outs of income tax. “We are usually able to reduce our clients’ tax liability with careful management of their finances”, he explains. “One of our overseas clients had been paying 10% tax on his rental income, but in consultation with our accountant we were able to reduce his liability to zero by offsetting the depreciation on the value of his property. Any landlord who does not take advantage of our expert advice risks losing money that can easily be saved!”

Creative Estates specializes in saving its clients from getting ripped off by unscrupulous contractors and making short-sighted decisions. “The polite Israeli expression for this is “fryer” – it means someone who is naïve and easily taken advantage of. Insurance companies are notorious for taking advantage of innocent landlords who do not realize that they need to negotiate more aggressively to get the pay-out that they legally deserve”, says Shaun.

“Shimon was managing his own property in Kfar Saba from his home in Canada. He called us one day because a number of pipes under the floor had burst and he didn’t know who to trust to fix them properly. Our maintenance crew took care of it and we took over management of the property. We then turned to his insurance company to make a claim for the costs of repairing the water damage.

“It took a few phone calls and we had to state our case very strongly in order to convince them that we were not willing to settle for their low offer. Being an Israeli lawyer by training meant that the negotiation was easier for me than it would have been for Shimon! Speaking Hebrew like a native means that the person on the other end of the phone does not think that they can get one over on me!”

Shimon’s apartment had clearly been built with sub-standard copper piping, and there were further pipe bursts. Creative Estates took care of them one by one, replacing them with stronger plastic piping so that the problems would not recur, and making successful insurance claims to cover the cost of the work. Not only did we save Shimon a fortune in repair costs, but he also saved on the air fares that he would otherwise have incurred to visit his property and take care of the problems.

Another client, Graham, recently wrote to us: “I have had a home in Israel for over 26 years and my only regret is that I only met up with Shaun two years ago! He is without doubt one of the most professional , efficient, trustworthy and organised person I have met. Nothing is ever too much trouble, no job is too small.”

Many absent landlords are recognizing that deciding not to use a property management company in Israel will cost them more money than paying someone to take care of their interests. We have proven time and time again that taking care of insurance claims and taxation issues on behalf of our landlords can save them a great deal more money than we charge.

Don’t be a fryer! Talk to Creative Estates Israel about managing your property in Israel. We’ll take away your headaches and ensure that tenants are happy, your property is well maintained, and your investment is profitable!

Israel’s Next Hot Property: Lod

People always ask us about where they can invest in real estate and see an increase in their returns. At Creative Estates we are not ‘profit prophets’, but we do keep our eyes and ears open for new developments that suggest which of the more affordable areas of Israel may be ripe for investment.

Lod is a city in central Israel that has been largely neglected until now. It is located just 30 minutes south of Tel Aviv but it has not been attractive to commuters. During the 80s and 90s it was known for violent crime, and it has a delicately balanced demographic make-up of 70% Jewish and 30% Israeli Arab residents. However, recent campaigns to clean up the city have been successful and people are recognizing its potential. Housing prices have been rising rapidly and there are new plans for municipal development.

Lod is traditionally associated with Israel’s first airport, which was known as Lod or Lydda until 1973, when it was renamed in honor of David Ben Gurion. Although the airport is located outside the city boundaries, it remains one of the major employers of Lod residents, together with the many related companies that have grown up around the airport.

What’s New in Lod?

In May 2017, Israel’s Ministry of Finance agreed with the Lod municipality to help build 17,000 housing units in and around the city, as part of a major program of urban renewal. This includes upgrading the transport infrastructure, connecting the eastern and western suburbs to the city center, and including two former moshavim as part of the city.

Community regeneration projects include educational start-ups, a religious ‘garin’ scheme that provides educational support in the city’s schools, and numerous coexistence projects that have helped to ease the tensions between Arab and Jewish residents. The city’s mayor has a clear agenda to upgrade the city and its poor image. For example, when construction workers digging for a new road expansion program discovered a well-preserved mosaic floor dating back to the Roman period, they set up the Lod Community Archaeology Program to engage local students from five Jewish and five Israeli schools in the dig to reveal and restore the mosaic (shown here).

Property Prices in Lod

According to the Madlan website, the price of a typical 4-bedroom apartment in Lod is currently 1.16 million NIS – significantly lower than the national average (1.47 million NIS) and much lower than the average price for Central Israel (1.74 million NIS). Significantly, the Madlan index shows that Lod apartment prices have increased by 50% since 2013. Rental prices in Lod are relatively high, and you can expect a rate of return of between 3.2-3.8% on property rentals, depending on the location and state of your apartment.

So, if you are thinking of investing in an up-and-coming city that is conveniently located in  Israel’s lucrative ‘Mercaz’ region, we suggest that you look at Lod. At Creative Estates we would be happy to speak to you about your real estate investment plans and offer you our property management services. Contact us today.

 

Fixing Rain Damage in Israeli Properties

Rain in Israel is considered a blessing for the country, providing essential drinking water and helping local farmers, but rain is not a blessing when it enters your property. Creative Estates Israel CEO Shaun Isaacson explains why rain damage occurs in Israeli properties during the winter and how to fix it.

In many houses and apartments in Israel you will see damp patches on ceilings and external walls during the winter, with bubbling plaster and paint a common featureg. If you or your tenants notice that there is water coming through during the rainy season, you may want to send someone to check on the roof, window frames and walls.

Why Do Israeli Homes Leak in the Winter?

Leaks are a fact of life in many Israeli homes, old and new because Israeli buildings are made of poured concrete, stone and tiles, and rain water tends to find and infiltrate even the tiniest cracks. Because the dry, hot summer is significantly longer than the short, wet winter, homes are designed to stay cool and are poorly insulated. White walls, tiled floors, flat roofs and large windows are all excellent for summer living, but they present many challenges during the winter months.

In other countries where houses are constructed out of wood, the issue of water damage is much more serious because wooden beams can rot and collapse. However, in stone and concrete homes the water generally drains through the cracks and dries out, causing no long-term damage but only superficial patches.

Recurring leaks are hard to prevent because water may enter through a crack at one point in the external wall and emerge somewhere else inside, making it very difficult to identify and fix the source of the leak. Fixing one crack does not guarantee that further cracks will not open up, particularly where surfaces are exposed to baking hot sun for extended periods.

Fixing Leaks in Israeli Homes

Israelis love technology, so naturally they have created a solution for the problem of recurring leaks. It is a portable x-ray machine that sees through walls and identifies where the water is coming from. However, it is not a cheap machine and hiring the expert who can use it and read the results of the scan can be very costly. It is usually recommended to use this technology in situations where the source of the leak is hard to identify, in order to minimize the damage involved in opening up walls, floors or ceilings to fix the problem.

The problem of rain collecting on a flat roof is a familiar one, and it can be very difficult to fix the roof in such a way that rain water runs away from the cracks instead of collecting in the same places and making the cracks worse. Roofs – whether flat or tiled – generally only leak in the winter, so that is the busy season for roofing engineers. Calling a roof expert in the summer may be cheaper, but unless you have the roof fixed before the rains stop, it is impossible to know whether the fix that you are paying for is going to work or not. The best advice we can give is to call a recommended roofer as soon as you see any sign of water penetration, so that it can be fixed before the damage gets worse and you can see that the water is no longer coming in.

Leaks around your property can be aggravated by blocked external drains, including in the frames of patio doors, which can fill with water and leak into the house. It is worth noting that holes made in the external walls – for example, where planters or hammocks have been hung from hooks – can invite water inside. In properties facing the sea, the problem of water damage is compounded by the corrosion caused by salt in the water.

Managing Mold in Israeli Apartments

Whilst water damage to paintwork is unsightly, the real problems arise when mold starts to grows on the wet plaster. Mold is troublesome because it can be toxic and can cause health problems. People who live in damp and moldy environments can suffer from throat irritation, coughing or wheezing, eye irritation, or skin irritation, and some people have mold allergies which cause more severe reactions. Black mold must be cleaned off damp walls so that its harmful spores do not spread. It usually cleans off easily with a diluted bleach solution or a mold removal spray, sold in Israeli supermarkets.

The property owner is responsible for fixing leaks, but tenants have a responsibility to mitigate their effects by informing the landlord or property manager and by keeping the property ventilated. Ventilation is crucial to prevent the development of mold and to help wet plaster to dry out between rain storms. However, tenants are often reluctant to leave their windows open in the cold, wet weather. A good property manager will keep an eye on this issue and recommend adding air vents if they see that a room is becoming moldy in the winter.

You will probably want to replaster the walls and ceilings to fix the damage from a leakg, but it is always best to wait for rain damage to dry out completely before plastering and repainting. Remember that the last rains in Israel may only happen in April, so don’t rush to the paint store too soon!

Repainting in the Spring

Recurring rain damage from leaks has given rise to the tradition in Israel of repainting the interior of your home every spring with white paint. It also explains why white is the most popular color for internal walls – not only does it help keep homes cool in the summer, but white paint is much easier to match than other colors!

It may also be a good idea for property owners to paint the outside of the building with waterproofing chemicals, particularly if the building is covered with Jerusalem stone. Although the indigenous yellow limestone is beautiful, giving Jerusalem its legendary golden glow, it is actually porous and not particularly helpful in protecting your property against the rain!

Creative Estates Israel has a team of maintenance experts who spend most of the winter months attending to leaks and water damage, and then repainting the properties that they manage. Contact us about managing your Israel property today.

Israel’s New Commuter Network

The new network of light rail lines across the Tel Aviv Metropolitan Area will not only relieve traffic congestion throughout central Israel, but it will also change the real estate market in the towns that it connects.

The long-awaited Tel Aviv Metropolitan Area Mass-Transit system is now under construction, starting with nine underground rail stations being built in central Tel Aviv along what is known as the Red Line. These stations will be connected by a light rail network across the city, with multiple train lines reaching out to connect the surrounding suburbs and towns, in addition to and intersecting with the existing bus route network.

real estate opportunities

NTA – Metropolitan Mass Transit System Plan for 2024

Tel Aviv–Jaffa is already Israeli’s largest metropolis, having absorbed many of the surrounding towns into its suburbs. The planned train system will enable commuters to live and work in different towns and to travel to work on public transport instead of sitting in traffic jams.

The Red Line will connect Petach Tikva, Bnei Brak, Ramat Gan, Tel Aviv–Jaffa and Bat Yam. The next line slated for construction is the Green Line, connecting Herzliya, Tel Aviv, Holon and Rishon LeZion. Simultaneously, work will start on the Purple Line, connecting Yehud, Or Yehuda, Ramat Gan, Tel Aviv, Kiryat Ono, Givat Shmuel and Petach Tikva. The Green and Purple lines are planned to open in 2024. Four additional lines are planned, eventually connecting more towns to the commercial heart of the country.

Tel Aviv’s New Red Line

The Red Line will be the first to open, hopefully in 2021. It will start in Petah Tikvah and continue along Jabotinsky Street in Bnei Brak, and through Ramat Gan. The tracks will continue to the Arlozorov train station, run along Begin Street and near the Azrieli Center, from where they will head south of the Kirya to Manshiyya and Jerusalem Boulevard in Jaffa, ending in the southern suburb of Bat Yam. In the future the line may be extended to meet the Moshe Dayan road interchange in Rishon LeZion.

The Red Line will cover a route of 24 kilometers, including 11 kilometers of underground lines running beneath the streets of  Tel Aviv. Twenty-four of the stations will be above ground, and 10 are being built underground. The plan is for trains to run 90 seconds apart during rush hours, and three to four minutes apart during off-peak times.

Planning Ahead

Anyone considering investing in real estate in Israel should check out the plans for the various rail lines and look for properties within walking distance of the planned stations. There is no doubt that proximity to the Tel Aviv Metropolitan rail network will increase the purchase and rental value of properties as commuters discover the benefits of light rail travel in Israel.

Talk to Shaun Isaacson today about opportunities for great real estate investments in Israel, and how we can help you to purchase and manage your properties in Israel for profit.

Cleaning House in Israel – 7 Essential Products

Creative Estates Israel manages many rental properties in Israel and sends in teams of professional cleaners between rentals and before owner visits. We asked our cleaning crew for the 7 best cleaning products for cleaning house in Israel, so here are their recommendations for keeping your home in Israel clean and shining!

  • Economica – household bleach is the universal cleaning product in Israel. It is used generously to clean floors and surfaces, often with pleasant scents added to the bleach to mask its unpleasant smell. It is easy to forget how caustic it is – always wear gloves and beware splashes on clothing.
  • Magic Sponge is the secret product that we use to keep our white walls white! Almost any mark comes off with a damp magic sponge, and it is not impregnated with chemicals so it is easy and safe to use.
  • Calgon often provides the remedy for those annoying limescale deposits that appear wherever water sits. Because water in Israel is ‘hard’, it leaves behind white calcium deposits. Accumulated deposits can block pipes and inhibit the functioning of kettles, hot water heaters, shower heads and washing machines, so look for appropriate Calgon descaling products for your appliances too.
  • Sponga Stick – it’s not a product, but it is the “weapon” of choice for most Israeli cleaners in the war on dirty floors. Simple but effective – simply wrap a damp cloth (shmatter in Hebrew!) around the rubber floor stick and wipe your floors quickly and easily. Sponga is the Israeli way to clean!
  • Window Cleaning Spray – this is a no-brainer for keeping windows clean so that you can see the sunshine and enjoy those bright blue skies. However, pick your season – there is no point cleaning your windows in the winter or the spring until the last rains are over, because rain in Israel often carries dust or sand, and you’ll just have to clean them all over again!
  • St. Moritz Oven Cleaner – if you need to clean your oven after a spill or to prepare for Pesach, this is the strongest cleaning product we know! It attacks baked-on greasy spills, but it is also highly toxic – open the windows to ventilate the kitchen, wear gloves and old clothes to use this product, and always keep it far away from children.
  • Vinegar – some people swear by natural cleaning products like vinegar and baking soda because they don’t like using dangerous chemicals. Vinegar can often help to remove light limescale marks and to clean windows, so you can save your chemical weapons for the heavier cleaning tasks.

If cleaning house in Israel sounds like hard work that you don’t have time for, the Creative Estates Israel cleaning and maintenance team would be happy to take care of your Israel rental property. Talk to Shaun Isaacson about our property management services today.

Aliyah and Israeli Property Prices

One of the factors in the steady upward trend in property prices over the past 10 years is the steady increase in immigration to Israel. Shaun Isaacson discusses how Aliyah affects the Israeli real estate market and what he advises investors who are planning to make Aliyah in the future.

Demand for property in Israel is driven both by increasing immigration from countries where Jews feel uncomfortable (like France, the Ukraine, Turkey and Venezuela), and also by planned Aliyah by people of all ages from English-speaking countries, for whom Aliyah is generally an ideological or lifestyle choice. Immigrants of different nationalities choose to settle in different cities around Israel – some are motivated more by price and some by the communities where they will feel most at home. This means that real estate prices in cities such as Herzliya, Ra’anana and Jerusalem are much less elastic than other places, because of the consistently high demand from Anglo Olim.

According to statistics from the Ministry of Immigrant Absorption, between 2001-2016   34,000 Olim settled in Jerusalem and 27,000 immigrants moved to Tel Aviv. During the past 15 years, almost 10,000 Olim from France and 10,000 Russian Olim chose to live in Netanya, while 21,000 immigrants moved to Haifa.

Aliyah and Israel Property PricesWhile Anglos tend to choose the communities where they have friends, many other immigrant populations tend to move en masse to more adventurous and cheaper places. Thousands of French Olim have moved all the way to Eilat and over 1,000 recent arrivals from Argentina moved to Beersheva. Ashdod, Ashkelon, Bat Yam, Beit Shemesh, Kfar Saba, Modi’in, Petach Tikva and Rishon LeZion are also popular destinations with many nationalities – there is an entire neighbourhood of Petach Tikva known as Little Belgium! There is no doubt that the steady flow of immigrants has helped to keep the rental markets strong in these cities, and also has an impact on property sale prices.

Although the Go South! and Go North! campaigns run by Nefesh BNefesh are incentivizing immigrants to move beyond Israel’s overcrowded urban communities, it requires an additional degree of courage for someone making the big move to Israel to choose a rural destination. Generally Olim prefer to start out in familiar territory where they have an existing support network to help them adapt to the challenges of Aliyah, and that often means renting their first home in a community where they know people from back home.

Shaun Isaacson, CEO of Creative Estates Israel, often helps Olim to find rental properties in Israel and also manages properties for ‘potential Olim’. “We have tenants in some of our properties who have just immigrated to Israel. I generally recommend to people that they rent for a year or more rather than buying a property when they first make Aliyah, because it helps to check out the area before putting down roots.

“At the same time, many of my property owning clients have bought Israeli real estate as a buy-to-let investment with a view to making Aliyah and living there later. In the current climate, I usually encourage investors to buy the property that will give them the best rate of return, even if it is not in an area where they can envisage living. The rental income will continue to flow when they themselves move to Israel and decide where they want to set up home.

“Getting a foot on the Israeli property ladder before making Aliyah is usually a good financial decision. But investment decisions should not be confused with deciding where in Israel you would like to live, particularly if your Aliyah is a few years ahead. Who knows how the real estate map of Israel will have changed by the time you arrive!”

For more information about investing in property in Israel, as an investment and/or with a view to Aliyah, please contact shaun@ceisrael.com in complete confidence for a no-obligation consultation.