The Israeli real estate market has seen remarkable growth and expansion in the past decade, leading to a surge in both residential and commercial property prices. This can be attributed to the high demand for housing that has surpassed the available supply, creating a competitive market and a scarcity of properties. The real estate market in Jerusalem and Tel Aviv has been particularly booming, with a strong demand for both residential and commercial properties that has resulted in a substantial rise in property prices.
Several factors have played a role in the growth of the Israeli real estate industry, including a stable economy, low interest rates, and government incentives for foreign investment in the property sector. The thriving tech industry in Israel has also attracted many international corporations and professionals, driving up the demand for housing. The shortage of housing units is also due to delayed construction projects by developers. Today, the total shortage of units across the country stands at over 200,000.
Israel boasts one of the highest population densities per sq.m in the world, making it an attractive location for developers. To keep up with the demand, over 60,000 units a year are needed, however, the current construction rate falls short, unable to reach even 40,000 units annually.
Over the past decade, the average property price in the Israeli real estate market has increased by around 35%. In Jerusalem, the increase has been even more remarkable, with prices rising by over 50% during the same period. This has made the Israeli real estate market an attractive investment destination for both local and foreign investors.
It's worth mentioning that there is a difference between the growth of resale and brand new apartments in the Israeli real estate market. Resale apartments have generally seen more modest growth, with average prices increasing by around 25% over the last decade. Conversely, brand new apartments have experienced more substantial growth, with prices rising by approximately 45% during the same period. This highlights the strong demand for newly built properties in the Israeli real estate market.
In conclusion, the Israeli real estate market continues to show robust growth and promising potential for the future. With its stable economy, low interest rates, and government incentives, the real estate industry in Israel is poised to continue its upward trajectory in the years to come.