Israel Real Estate: What Overseas Investors Should Know

Since the outbreak of the war, we have seen significant interest from Jewish investors in the United States, Canada, the United Kingdom, Australia, South Africa, France and other countries who are considering real estate investments in Israel. Some of this interest has already translated into transactions, and I have personally been involved in transactions and investment processes with overseas Jewish investors during this period.

But the transactions that have not yet happened are just as interesting.

In my conversations with overseas investors, I meet individuals and families who are currently studying the Israeli market, examining properties, investment and financing structures, and building relationships with local professionals. Some are considering residential apartments, while others are looking at entire residential buildings, portfolios of apartments, income-producing properties, office and commercial space, logistics centers and other larger transactions. The war has naturally led some investors to wait before making a final decision, but the due diligence and preparation are already taking place.

From a financial perspective, this is an interesting time to understand the Israeli market.

At the end of June 2026, approximately 84,000 new homes remained unsold in Israel, representing around 26 months of supply at the current sales pace. In theory, such a large inventory, combined with slower sales, should create significant pressure on developers and lead to sharper price declines. In practice, new-home prices in June-July 2026 were only 0.8% lower than during the same period a year earlier.

One of the factors that helps explain this gap is financing.

Bank credit for residential development increased by approximately 40% during 2025. By the end of that year, 44% of banks’ exposure to residential projects was to projects where construction was progressing faster than sales. In other words, in some projects, construction continues to advance even when apartments are selling more slowly.

Credit gives developers time, but that time has a cost. Unsold apartments and other properties continue to carry financing costs, while capital remains tied up. Therefore, the fact that a developer is not reducing the asking price today does not necessarily mean there is no room to structure an attractive transaction.

This is particularly important for overseas investors.

In transactions of this kind, price is only one variable. Payment terms, the timing of capital, financing structure, security arrangements and certainty of execution can all have significant economic value for both sides.

An overseas investor with available capital and the ability to execute a substantial transaction may therefore have a very different negotiating position from an individual apartment buyer. This does not necessarily mean that the developer is under financial pressure. Rather, a single transaction that provides certainty, cash flow and releases capital can have financial value in its own right.

This is also why the current period is relevant for Jewish investors considering increasing their exposure to Israel. Those who are not yet ready to complete a transaction can use this time to understand the market, define the scale of their investment, examine financing structures and identify the types of properties and transactions that fit their objectives.

Ultimately, in a significant Israeli real estate transaction, the question is not only how much the property costs. It is also important to understand who owns it, how it is financed, what the seller’s financial considerations are, and what transaction structure can create value for both sides.

For overseas Jewish investors currently considering real estate transactions in Israel, this is the right place to start.

This article is for general informational purposes only and does not constitute investment, legal or tax advice. Any transaction should be evaluated individually based on its specific circumstances.