The last few months have obviously brought many unexpected challenges to the Jewish people. May blessings be upon the soldiers of the IDF and all of Israel, wishing them a speedy victory, safety, security, and ultimately peace.
Since the breakout of the war, interest rates in Israel have risen slightly. The average rate for a 30-year fixed mortgage is now around 5.25%, which is still significantly lower than in the USA. This increase is one of the factors that has contributed to the slowdown in the real estate market since the start of the war.
While the overall market has been much quieter recently, there are interesting opportunities available for purchasers with a long term perspective and a bit of cautious optimism.
With higher interest rates and many construction projects delayed, builders are under pressure to bring in fresh cash now in order to minimize their need for bank financing. As a result, some are offering very attractive deals (with full bank guarantees) such as:
- A new development in Raanana is offering buyers who put down 20% now to not make any additional payments until getting the keys in 2–3 years. The final price is locked today and is not linked to the builder’s price index (as is common in most first-hand purchase contracts).
- A new luxury development in Ramat Beit Shemesh is offering buyers the opportunity to put down only 15% now and pay the balance upon the getting the keys in 3 years.
- A luxury development in Jerusalem is offering significantly discounted pricing to purchasers who can pay 50% now (the balance is due in 3 years when the project is ready and there is no linkage to the builder’s price index.
In addition to buying directly from builders there are a few more interesting ideas for second hand properties. An agent in Ashkelon has told me that there is a great opportunity now for purchasing second hand apartments. Of course, based on the news of the last two months that may sound silly and reckless, but her point is that the rockets will eventually stop and Ashkelon prices will go back up and eventually go even higher as it is a beautiful city near the beach and the prices are still significantly less than other nearby cities such as Ashdod.
And finally, because it is very unlikely that the Beit Shemesh municipality will grant permits for any more single family or duplex homes, Anglos have started to purchase single family homes in the nearby MOSHAVIM. The price of these single family, free standing homes (which are built on large plots of land) can still be quite a bit below the price for an attached duplex or a two story apartment in a large building. Due to this limited supply, it seems logical to project that the value of these homes will continue to rise sharply over the coming years as more people make Aliyah with the hope of finding a single family home in the Beit Shemesh area.
If you would like more information about any of these real estate opportunities, please contact me at asiegel@mortgageisrael.com and I will put you in touch with the relevant agent. And, of course, I would be happy to help with any questions related to mortgages, foreign exchange, or any other aspect of making Aliyah and/or purchasing property in Israel.