8 Reasons to Invest in Israeli Real Estate in the New Year

In an uncertain world, Israeli real estate remains one of the most reliable and profitable investments that you can make. Here are just 8 of the financial arguments for investing your money in Israel during the coming year – leaving aside the many emotional and personal reasons that people choose to own a home in the Jewish State.

  1. Israel’s housing prices have risen more than 5% every year for the past 20 years, with even higher rates of increase in Israel’s populous and popular central region. This rate of increase shows no sign of slowing and is great news for investors.
  2. Demand continues to outstrip supply in the Israeli real estate market, largely due to the slow bureaucratic approval of building permits. Successive governments have failed to address this problem.
  3. Strong Aliyah trends and other demographic factors are expected to keep the demand for housing high in the coming years.
  4. 35% of Israelis rent their homes, and rental apartments are in short supply and expensive, especially in the most popular central region.
  5. The profitable return on Israeli real estate investment comes partly from rental income, and partly from the sale of your property.  You can typically achieve 25% return on investment in 3 to 4 years.
  6. Israel’s new government has announced plans to rezone downtown office buildings and commercial spaces for conversion into residential units. This will create small apartments in city centers, which will be easy and profitable to rent. 
  7. The Tel Aviv municipality is investing 100m NIS in renovating and upgrading apartment buildings, increasing their value. Similar to the now-defunct Tama-38 program, investors can benefit hugely if a property they own qualifies for improvement. Details here.
  8. The long-term real estate rental market in Israel is steady and profitable, especially when your investment property is managed by property management experts. From finding quality tenants to ensuring that your property is well maintained, the Creative Estates property management team will protect your investment as if it were our own.

Shaun Isaacson is CEO of Creative Estates Israel, a qualified realtor, lawyer and MBA. Find out more about his company’s investment and property management expertise at www.CEIsrael.com

Spotlight on Hod HaSharon

One of Israel’s best kept secrets, Hod HaSharon is a sought-after place to live with a highly educated population and attractive facilities.

Hod HaSharon means ‘glory of the Sharon’, referring to the central part of Israel between Herzliya, Ra’anana and Petach Tikva. It was established in 1964 to unite four agricultural towns, and it became a city in 1990. It still has agricultural land and green spaces, but intensive building projects in recent years have expanded the city and increased its population to 65,000 residents.

Israel’s Central Bureau of Statistics publishes an annual socio-economic index listing the best places to live in Israel, and Hod HaSharon is ranked highly according to their criteria. These include the residents’ average monthly salary, the quality of the local schools, and the percentage of students who matriculate (85%) and who participate in youth activities (50%). This attracts Israeli families who are looking to raise their children in a positive environment. For real estate investors, these ratings also attract ideal long-term tenants!


As a relatively new city, Hod HaSharon has been carefully planned with beautifully landscaped parks and walkways. (You can explore this for yourself by watching this video on YouTube of someone walking silently around Hod Hasharon for over an hour; it has attracted 63,000 viewers in 6 months! The city is known for its great selection of indoor shopping centers with excellent facilities for all ages.

Among Hod HaSharon’s famous sons and daughters are Eurovision star Netta Barzilai, supermodel Bar Rafaeli, award-winning actress Shira Haas (“Unorthodox”) and a slew of Israeli footballers, tennis players and swimmers.

The real reason for Hod Hasharon’s popularity is that traditional real estate magnet: location, location, location. Its proximity to Tel Aviv, Ramat Gan, Givatayim and Petach Tivka puts Hod HaSharon right at the heart of Israel’s start-up economy, with endless employment opportunities. It is also well-connected to Israel’s rail network with two stations, one in the north and one in the south of the city. This means that it has all the advantages of being part of the Tel Aviv metropolis, including convenient routes to Israel’s best entertainment venues and beaches, but with a more suburban feel and access to open spaces, such as the Hod HaSharon Lake and Park shown above.

Creative Estates Israel manages a number of rental properties for overseas investors in Hod HaSharon. These apartments typically generate a solid 3% return on investment, but will probably sell for much more than their purchase price, because Hod HaSharon is becoming a more popular place to live every year.

Shaun Isaacson from Creative Estates Israel would be happy to speak with you about real estate investment opportunities in Hod HaSharon and in the other cities and suburbs of the Sharon region of Israel. Contact us for a free no-obligation conversation.

The Only Way is Up!

Talk of a global recession is not affecting Israel’s real estate market. The sale of new homes in Israel is at an all-time high, and changes to mortgage policies will boost the market further.

COVID-19 has not dampened demand for property in Israel. In fact, the opposite is true. The Central Bureau of Statistics reports that 10,550 new homes were sold between August and October 2020, after a record-breaking June. Sales of new homes are actually at their highest level for the past 10 years. Topping the list of most popular cities was Ashkelon, followed by Beit Shemesh, Tel Aviv and Beersheva.

Increasing Demand for Homes

Israel’s demographics are feeding the demand for home purchase – our strong birth rates and high marriage rates are bucking the international trend. At the same time, thousands of new Olim are arriving in Israel each month despite the Covid-19 pandemic, including large groups of immigrants from Ethiopia and India in recent weeks. Although Aliyah does not directly impact house sales, because most Olim rent their first home in Israel, it boosts population figures and is further evidence of confidence in Israel’s economy.

Financial Confidence

Despite the second lockdown and the Jewish holidays, Israel’s banks issued more mortgages in September 2020 than any month over the past 10 years. The ending of the government’s Buyers Price Target plan, influenced the number of mortgage applications, together with low interest rates.

The Supervisor of Banks has helped by extending Israel’s mortgage holiday to help customers struggling with the economic fallout from the Covid-19 crisis. Repayments of mortgages and other loans can be extended until March 2021.

Helping Israeli Home Buyers

In a surprising move, the Bank of Israel announced in December that it is changing the rules for mortgages to make it easier for customers to take advantage of variable interest rates. Previously only one-third of a mortgage could benefit from a variable interest rate, and two-thirds had to be repaid at a fixed rate. Now the numbers are reversed – borrowers can link up to two-thirds of their mortgage to the variable prime-linked interest rate. This change is expected to lower the cost of mortgages in the short term at least, while interest rates remain low, and further boost home purchasing.

The strength of the Shekel against the Dollar clearly makes Israeli real estate more expensive these days for foreign investors, but there is no doubt that the property market remains strong, with many attractive properties on offer.

The Benefits of Buying Off-Plan

Creative Estates Israel works with the real estate investment experts of the Israel Property Network, who are currently recommending off-plan projects around Israel. These allow purchasers to put down as little as 20% of the purchase price of a new-build apartment now, with up to two years to raise the remaining sum for payment when the property is completed.

Such off-plan projects can appreciate in value by 25% between purchase and completion, allowing investors to benefit from a minimal investment with enormous returns. Renting out the finished property can help to finance the loan taken out to pay the balance of the purchase price, with Creative Estates’ team of experts managing the rental contract and taking care of the property to maximize the returns.

It is always a good time to buy and rent real estate in Israel. Talk to Shaun Isaacson, CEO of Creative Estates Israel, to find out more about the best options for you.

Maintaining Properties Even During Lockdown

Creative Estates’ Property Management team has not stopped taking care of properties all over Israel during the first or second corona virus lock-down. Here are some of the real estate issues we have been dealing with this past summer.

“For us, it’s business as usual. Tenants and property owners know that they can call on us and we will be there for them”, explains CEO Shaun Isaacson. “We are still busy checking properties, finding new tenants, organizing contracts and carrying out repairs. The hardest aspect of our work at this time is taking potential tenants to view properties. People understandably don’t want to meet inside apartments or spend too long in someone else’s living space. We are careful to follow government guidelines, and we have managed to maintain our record of 100% rentals even during lockdown.”

Helping Tenants

Erev Rosh Hashanah this year was a Friday, and it also marked the start of Israel’s second official lock-down period. Shaun took a call from tenants in an apartment in Netanya whose air conditioning system was not working. The temperature that day was 31°C (87°F) and the heatwave was set to continue for the two days of the festival. While all the stores were closing down and the police were preparing to close the roads to traffic on Friday morning, we managed to send one of our air-con engineers to the apartment. Fortunately he was able to fix the problem on the spot, and our tenants were able to enjoy a cool and happy start to the New Year.

Careful tenants can often save their landlords significant amounts of money just by noticing problems. In one apartment that we manage in Ra’anana, the residents spotted that the opposite side of the wall of their bathroom was damp. They called us quickly, and we brought in a water detection specialist to look into the problem. It turned out that there was a leak in a bathroom pipe within the wall. Had it gone unnoticed, it could have caused significant damage not only to that apartment but also potentially to all the apartments below. Creative Estates ensures that all apartments have good insurance policies to cover such events, and we arranged for the insurance company to send their assessor. He approved the work of opening the wall to fix the leak, closing it up again and painting the wall. Within one week, with minimal inconvenience for the tenants and minimal expense for the owner, the problem was resolved.

Helping Overseas Owners

Many of our overseas home owners have been unable to visit Israel during 2020. One such client has a holiday home in Herzliya that has been sitting empty all year, and we check it regularly. They asked us to renegotiate their contracts with their pool cleaning and gardening companies for the next few months. We were able to reduce their maintenance expenses by approximately 50%. We are currently offering a free property check service to any overseas property owner.

This summer, another overseas client inherited an apartment in Tel Aviv that had not been lived in for four years. There was an inch of dust on the floors! He asked us to fix it up at minimal cost, so that it could be rented out in a livable state. We sent our team to clean it thoroughly and to upgrade the old bathrooms to modern standards. Within 2 months of receiving his instructions, we had found tenants for the apartment. Their rental payments were covering the upgrade costs, as well as giving the owners an income!

Creative Estates has joined the nationwide Israel Property Network group, expert estate agents helping people around the world to buy and sell real estate in Israel. They also rent, lease and manage short term rentals for some of our properties. So, if you have a property in Israel, or if you are thinking of investing in one, contact us today for a free consultation about managing it as a holiday home or and renting it out for you.

Forging a New Partnership

When my friend Sabrina Ziff invited me to join her Israel Property Network, I was flattered and excited by the opportunities that it offers for the growth and development of Creative Estates Israel.

I was flattered because Sabrina and her colleagues recognize the expertise that Creative Estates Israel has developed in the complex field of property management in Israel, which includes not only the management of long-term rental (investment) properties, but also home maintenance and management services for overseas owners who own a property in Israel and choose not to rent it out.

I am excited because teaming up with the Israel Property Network expands our horizons even further throughout Israel. IPN has 14 regional hubs around the country, including 4 walk-in realtor offices, and employs 20 real estate professionals who really know their stuff. Creative Estates can now benefit from their local expertise, and consult with them on behalf of our clients who are considering investing in Israeli real estate.

Sabrina Ziff has nearly three decades of real estate experience in the UK, Europe and Israel. She has built her network of licensed realtors and support staff to provide professional help to English-speaking clients with real estate purchase and sales, short term and long term rentals, new-build real estate projects, and land purchase for residential and commercial purposes. Their understanding of the Israeli real estate market is second to none, and they share our commitment to high quality personal service. The Israel Property Network is respected throughout the Jewish world, with particularly strong connections in the United States, the UK and South Africa.

That is why being chosen by IPN as their partner of choice for property management is a huge compliment. Sabrina and I expect that many more people will be looking to move to Israel in the coming months and years, and this collaboration allows each of us to focus on our core business, knowing that we can rely on each other’s expertise to give the best possible service to both domestic and overseas property owners and new Olim.

Living in the shadow of the coronavirus is difficult for everyone, with the uncertainty and economic challenges that we are all experiencing. Forging a new partnership at this time is a way of focusing our commitment to help people in the best way that we can. At Creative Estates Israel, that means protecting our clients’ assets while they cannot visit Israel, and ensuring that those who rent out their properties continue to receive the best possible return on their Israel investment property.

Stay safe everyone!

Creative Estates and the Israel Property Network Join Forces

Creative Estates Israel and Israel Property Network are excited to announce their collaboration on the management, purchase and rental of properties all over Israel.

The new partnership between the Israel Property Network and Creative Estates Israel was born out of a natural synergy and a long-standing friendship between the company CEOs. Both companies are headquartered in Ra’anana and are active in Israel’s national real estate market. Both employ licensed professionals and have many years of experience. Both serve Israeli and international clients, who expect  – and receive – high standards of customer service and reliability.

Creative Estates Israel was founded by Sam Turecki in 1984. CEO Shaun Isaacson, who is a qualified Advocate (LLB), Licensed Realtor and M.B.A., learned the business from Sam and took over the company in 2013. He has built up the business and expanded its portfolio of managed properties throughout Israel, providing the most comprehensive and reliable property management service to owners based both in Israel and overseas.

Founded by Sabrina Ziff, who has nearly three decades of real estate experience in the UK, Europe and Israel, the Israel Property Network brings together independent estate agents serving cities and communities throughout Israel. Licensed realtors and support staff in the Israel Property Network’s 14 offices provide professional assistance with sales, rentals, holiday home management, new-build real estate projects and land purchase for residential and commercial purposes. They also offer special services for Olim – immigrants to Israel – and investors.

Sabrina Ziff, CEO of the Israel Property Network, says: “Shaun and his team manage a large portfolio of residential and commercial properties across Israel, and we admire their professionalism and responsiveness. They were our first choice of partner to help our clients with the management of their properties, because they have expertise with long-term tenancies, holiday homes and holiday rentals. We expect that many more people will be looking to move to Israel in the coming months, and this collaboration allows us to focus on our core business of helping property investors and Olim to find the properties in Israel that best suit to their needs.” 

Shaun Isaacson, CEO of Creative Estates Israel, welcomes the collaboration. “Sabrina heads a growing national network of real estate offices, staffed by professional agents who really know their local markets. Joining forces with the Israel Property Network connects us with an independent national company that is known and respected throughout the Jewish world, with particularly strong connections in the United States, the UK and South Africa. By allowing us to take responsibility for the property management side, Sabrina and her colleagues are freed up to continue expanding their business, while still providing the highly-personalized service that their clients expect.”

Find out more at www.IsraelPropertyNetwork.com

Business as Usual in Unusual Times

People have been asking me about the state of Israel’s real estate market and how we have been affected by the COVID-19 pandemic.

It is clearly too early to tell what the longer term impact will be on Israel’s economy, on the demand for housing for the projected wave of immigration, or on the housing market. Our government is only a few weeks old, and the new housing minister – Yaakov Litzman from the United Torah Judaism party – has yet to announce his intentions. It could be said that, during the past year, the absence of a government has actually left the Israeli real estate market to flourish without interference!

COPING WITH COVID-19

Like all businesses around the world, we have had to adapt our business practices to cope with the restrictions of social distancing and hygiene. We have been wearing face coverings and gloves when visiting clients’ properties and meeting with tenants. During the lock-down, we were categorized as one of the necessary services that people could call on if they had problems with property maintenance. We did deal with several emergency call-outs in Ra’anana, Herzliya, Haifa and Netanya, to mention just a few. We have also been checking empty properties for landlords who are stranded overseas and cannot visit Israel at the moment.

We have extended our offer of free property checks to overseas property owners who are not clients of Creative Estates Israel, and will continue to do so for as long as people are reluctant to travel.

ISRAEL’S RENTAL MARKET

We manage a number of homes that are usually occupied during the peak Pesach season and during the summer vacation. Many visitors from outside Israel have sadly had to cancel their visits during 2020. In Tel Aviv and Jerusalem, where there are an estimated 30,000 short-term rental properties, 2,000 properties were taken off the tourist market (through AirBnB and similar platforms) and advertised for rent on the local market, which caused a temporary dip in short-term rental prices.

The Bank of Israel reported a fall of 15% in rents during the lock-down period, but this did not affect the overall upward trend. Between March 2019 and March 2020, rental prices in Israel rose by an average of 2.3%, and by the end of April activity in the rental market returned to pre-lock-down levels. In the metropolitan area of Tel Aviv average rents have risen between 8 – 10% over the past three years.

RETURNS ON INVESTMENT

Real estate market experts point out that past government policies to discourage property investment may have contributed to an upward pressure on rents. This is because 27% of Israeli households live in rented homes, and the proportion of apartments bought by investors for rental has fallen from 30% to 13% of purchases. This has contributed to a shortage in the supply of long-term rental properties, while plans to expand the housing stock and encourage renters to buy their own homes have been slow and ineffective.

During this difficult economic period, we fully expected to receive requests from tenants in the properties we manage to accept delayed rental payments. However, I am happy to report that only one of our tenants asked to pay late, and they were actually able to pay their rent in full, so none of our landlords were affected by rent delays. It probably helps that we are careful in selecting tenants for our properties and prefer to set up direct payments with them.

We understand that in other countries the situation has been difficult for landlords, where non-payment of rent has jeopardized the security of their investments and their ability to cover mortgage payments, but in Israel the rental market has remained robust. With talk of a wave of 50,000 new immigrants forecast for the coming year, we are optimistic that Israel remains a prime market for real estate buy-to-let investment.

We look forward to welcoming our overseas landlords back to Israel very soon, and we wish our friends and clients in Israel and around the world a healthy summer. Stay safe!!

Beware Unscrupulous Agents!

Foreign owners of Israeli properties are being ripped off by unscrupulous real estate agents and negligent managers. Don’t be a fryer! !

Shaun Isaacson, CEO of Creative Estates Israel, has noticed that some overseas Israel property owners are being charged higher than normal agency and legal fees by unscrupulous agents. Because they are far removed from the Israeli market, they do not realize that these charges are extortionate.

In Israel, the standard agent’s fee for a property purchase is 2% of the sale value, or less, but certainly not the 5% commission that foreign buyers are sometimes charged. Overseas owners should also check carefully that the agent who wants to help them buy property in Israel is actually a licensed realtor and not relying on a friend’s property license.

Having invested in a property in Israel, it is important to protect your investment by hiring an experienced property manager. If your property is poorly maintained, or if the mortgage is not paid because the tenant defaults on their rent payments, owners can find themselves in a real mess. Property managers should report regularly to the owner about all income and expenditure associated with the property, as well as reporting to the Israeli tax office if their rental income is above the reporting threshold.

“Many property managers are inexperienced and incompetent, or worse”, says Shaun. “I know of owners who have been prosecuted because their negligent managers did not issue receipts to tenants and did not keep proper financial records. Sometimes tenants withhold their rental payments for several months because of something that could have been easily fixed.”

Shaun is not only a licensed realtor and experienced property manager, but also a qualified Israeli lawyer. He is only too aware of the different tricks that unscrupulous real estate agents and managers play on absent landlords. Unnecessary repairs are common, and adding kick-backs when hiring friends to work on properties they manage. That is why Shaun recommends getting references from other property owners – ideally those who live in Israel and know what is happening with their apartments.

Creative Estates manages properties all over Israel worth 350 million NIS and delivers monthly reports to each client. They have a team of maintenance staff to carry out regular and emergency repairs, which keeps costs down for the owner.

Landlords should ensure that their property is insured and, in case of a leak or other accidental damage, you need to pursue your claim aggressively to make sure that the insurers pay out. “It is very difficult for someone who lives thousands of miles away to manage their own property in such a situation. The well-meaning friend who agreed to manage your property for you would find themselves out of their depth if something went really wrong.”

In Israel, the term ‘fryer’ means someone who is easily taken advantage of, and it seems that some foreign landlords are treated as ‘fryers’ by unscrupulous Israeli agents. So don’t be a ‘fryer’!

Heating Homes in Israel

When heating rental properties in Israel during the winter, safety and cost efficiency are the clear priorities for all landlords, tenants and property managers.

Israel’s winter season is short but can get very cold, particularly since homes are built to stay cool and are not insulated to stay warm!

As experts in managing properties in Israel, at Creative Estates we are conscious of the need to provide heating and cooling for the rental homes that we manage. Today it is recognized as potentially dangerous to use bar heaters which can easily catch fire, so we make sure that tenants are using safe radiators and making appropriate use of the heating systems that exist.

Standard Israeli Heating Systems

Air conditioning systems are widely used for heating in the winter, particularly in Central Israel where winters are generally mild. They are cost effective and only require slight modification of the vent direction between summer and winter use.

Hot water supplies in most Israeli homes are generated by solar energy, with solar panels and hot water storage tanks on the roofs of most buildings. In the winter, the lack of sun can leave tenants without sufficient hot water, so most homes have secondary hot water systems. These can be powered by electricity or gas, and usually include timer systems so that tenants can program them to provide hot water at the times they want to take showers.

Installing New Heating Systems

When updating properties and considering heating options, we usually recommend that property owners switch to gas, which has become much cheaper than other fuels in recent years, and particularly since Israel discovered and started to use its own offshore gas reserves.

Installing underfloor heating is a popular facility to add when a property is renovated, because it is necessary to take up the floor tiles in order to lay hot water pipes. This is particularly worthwhile in Jerusalem and other towns where the temperatures frequently drop to freezing.

Safety First

While tenants prefer to keep doors and windows closed when heating their home, it is important that heating and hot water systems have sufficient ventilation systems for safety. Where heaters are powered by gas, rooms must be well ventilated so that poisonous and toxic fumes can escape. It is also highly recommended to install smoke alarms and even carbon monoxide alarms near such heaters.

If you are a landlord and you would like advice on the most cost-effective and safe way to heat rental properties in Israel, contact Shaun Isaacson at Creative Estates Israel.

Israel Housing Prices: Reviewing the Past Decade

Housing prices in Israel have risen by a national average of 47% over the past decade, with apartments in some cities appreciating by 78% over 9 years. How can potential investors take advantage of this trend?

According to a study by the property resale website Yad 2 (shown below), the prices of 4-room apartments throughout Israel have increased in almost every city since 2011. 2011 was the year of the street protests over the price of housing and cottage cheese. In response, the government of the day promised to implement measures to increase building projects and create more affordable accommodation.

In an attempt to help first time buyers, it was suggested that some homes would be marketed with 0% VAT. The only effect of this suggestion was to temporarily suppress the demand for housing during 2014-2015, while potential purchasers decided to wait for this discount to come into effect. When it failed to materialize, the build-up of demand was released and caused a spike in house prices in 2016.

The next policy suggestion was an increase in the purchase tax for purchasers of multiple properties, and while this was being discussed it caused a flurry of property purchase among investors rushing to beat the tax. Political horse-trading prevented the government from introducing this investment tax.

Planning and building new housing projects inevitably takes time, and Israel has a constantly increasing population, so demand continues to outstrip supply. With low wage inflation over the past several years, people who cannot afford to buy in the popular central cities of Israel have been buying lower-cost properties in cities like Ramle, Lod and Bat Yam. As a result, the house prices in these areas have increased more dramatically over the past 10 years than in more expensive cities like Tel Aviv, Netanya and Herzliya.

Property management and investment expert Shaun Isaacson explains: “Investment in transport infrastructure, connecting the central conurbations with the periphery of the country, is helping to expand the commuter belt and making more distant suburbs more popular. That is why we see the housing market gradually flattening out in the coming years, with a smaller differential between previously cheaper and more expensive cities.”

In Lod, a 4-room apartment that sold in 2011 for 856,000 would now cost 1,520,000 NIS – a staggering 78% increase. In neighbouring Ramle, prices have risen by 68% from 996,000 to 1,674,000 in 2019. At the same time, comparable apartment prices in Ra’anana have risen by only 27% over the same period, from a starting price of 1,777,000 to 2,260,000 NIS.

“While Anglo investors typically choose the cities that they know personally, it is often more lucrative to invest in lesser known and cheaper locations, where prices are rising faster. This price list is a snapshot of one aspect of the Israeli real estate market, but we have a much deeper understanding of which areas are most profitable for buy-to-rent investors, and we are happy to advise.”

You can contact Shaun Isaacson at Creative Estates Israel in complete confidence, to discuss profitable investments and property management in Israel.

Yad2 Property Price Survey