Ceasefire & the Cost of War

The past 15 months have brought with them a prolonged sense of uncertainty in Israel. The country has taken a beating, and along with it, the economy. Some credit rating agencies, like Moody’s, have slightly downgraded Israel’s economic stability, citing concerns about the fiscal impact of military actions and damage to economic confidence. Despite this, Israel and its economy remain resilient. And the real estate here remains a solid investment.

Historical Trend

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, 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 Envelope 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, there are waiting lists for them. 

According to reports, a recent Sderot machir lemishtaken project (a government initiative providing reduced-cost housing to first-time Israeli homebuyers) 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, including Ashkelon, Netivot, and Be’er Sheva. 

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. Since 2023, home prices here have already risen 7.8%.

That’s why my advice to potential property buyers is always that it’s 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. It’s 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, maybe you can purchase an investment in Bat Yam or Tzefat. 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. Globes reports that the number of properties purchased by foreigners rose 50% in 2024, 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 a rising interest in aliyah, especially as historical trends show increased immigration following conflicts. 

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 of Israel and looking to buy something to hold onto for your aliyah or retirement, the opportunity to realize your dream and to 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.