Home construction in Israel has increased over the past 20 years. In the 1990s, the government constructed more public housing developments to accommodate new immigrants, which means there are many smaller, inexpensive properties.
More recently, private construction has also increased as more foreigners buy second homes in Israel. As a result, there are many properties available in Israel. Properties range from small apartments to large homes, and there is a wide range of qualities and prices for every type of property.
Real estate prices in Israel have fluctuated in the past, but the overall trend has been an increase in property value. In 2010, the Israeli government feared a housing bubble due to the rapid increase of property prices, so be cautious when entering the Israeli real estate market.
Additionally, the Israeli real estate market is sensitive to politics. Israel is a safe country (your home probably won't be attacked by terrorists), but political unrest may decrease the value of your real estate in Israel. Be sure to have enough funds to cover mortgage payments in the case your property's value decreases.
For more up-to-date predictions and information about specific markets, see the Global Property Guide's page on the Israeli housing market.
Who can purchase Israeli real estate?
Residents, immigrants and foreigners may hold Israeli land anywhere in the country (this includes Arab foreigners and Palestinians).
However, there are areas which foreigners should avoid because of land disputes with Palestine. If possible, avoid purchasing land in and near the Gaza Strip and West Bank. If you must purchase land in those areas, you must certify the land is part of the Israel. An attorney will help you with this process.
The government owns about 80% of the land in Israel. People who wish to build on government land sign long-term leases. To find out if a piece of land is held by the government, contact the local Deed Register's office.
Choosing a neighbourhood
Before you choose a neighbourhood, consider the area, commute to work and nearby medical facilities. If you have children, also consider nearby schools. As with any property, the more expensive homes will be in central locations and gentrified neighbourhoods.
Many neighbourhoods have immigrant populations. If you do not speak Hebrew, you may want to settle in an English-speaking neighbourhood. If you're looking for a English-speaking communities in Jerusalem, consider Baka, Ramot or the German Colony. In Tel Aviv, the northern and central parts of the city have more English speakers. Haifa's Zichron Yaakov, Pardes Hanna Karkur and Binyamina communities also have many English-speakers.
Some Israeli communities are very religious (Haredi) and are home to Orthodox Jews. Community members observe Shabbat (Jewish holy day) very strictly and may block public transit in the community on Shabbat. If you're not very religious and don't like the idea of getting locked into your home during these days, you might want to re-consider this beautiful apartment you found in a Haredi neighbourhood.
To get an idea for the Israeli property market, you should research available properties online. Lagur Real Estate and Anglo Saxon Real Estate have many property listings in areas throughout Israel. These properties are listed in English.