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  • Writer's pictureGedaliah Borvick

Israel’s Birthday Present

Updated: May 2, 2023

Kachol V'lavan (Gedaliah Borvick)

Happy birthday to the State of Israel! At 75 years old, the country has thankfully been weathering the global economic downturn relatively well. Let’s address a number of issues affecting Israeli real estate and then examine some of the popular Anglo markets.

Population Growth

In 2022, Israel’s population increased by 1.5%, four times the average of developed countries, and the country’s total population is expected to double within the next 30 to 50 years. With demand projected to continue outstripping supply, coupled with rising construction costs, we expect housing prices to remain firm in the short term and rise in the long term.


An extremely distressing issue is the escalation of global antisemitism. Focusing on the US, the Anti-Defamation League reports that antisemitic incidents in 2022 spiked by 36% over the previous year, representing the highest number of incidents since the ADL began tracking data in 1979. Antisemitism is one of the reasons that has led to an increase in people making aliyah and to an upsurge of overseas buyers purchasing Israeli real estate as investments.


Mortgage interest rates have gone up globally. Thankfully, rates in Israel have increased less dramatically than in other countries. A year ago, the interest rate on a 20-year fixed rate mortgage hovered around 3.5%. Today, the rates are around 5%. For first-time buyers, this increase is meaningful and, consequently, the volume of apartment sales in secondary markets – where many purchasers are young families on tight budgets – has gone down significantly. In contrast, sales in primary markets have remained resilient. To avoid high mortgage rates, some buyers are purchasing on paper and deferring taking out mortgages for a few years. Several new projects offer 20/80 payment schedules, where buyers pay 20% on contract, and fund the final 80% at the end of construction. This allows buyers to wait three years until taking out a mortgage, with the expectation that interest rates will decline over the next 36 months.

Strong Dollar

One big reason why overseas buyers are active is the strong US dollar (USD), which effectively lowers the property cost. As of April 15, 2023, the USD is worth 3.67 shekels. One year ago, the USD was 14% weaker at around 3.2 NIS. The cost for an American buyer to purchase a three million shekel property is $820,000; a year ago, it would have been $935,000.


Netanya and Beit Shemesh are excellent case studies to understand sales activity across the country. Prices in Netanya have remained stable, but the volume of sales in its secondary markets has slowed down. In comparison, prime Netanya locations, such as along the shore, have not experienced any downturn in sales volume. Somewhat similarly, Beit Shemesh and Ramat Beit Shemesh have experienced rising prices in all the submarkets, and overall sales remain strong. However, there has been a noticeable slowdown in sales volume in neighborhoods that cater primarily to younger buyers.

In Jerusalem, prices have increased significantly over the past year, and sales remain brisk for existing properties and for apartments under construction. Based on strong sales volume and the dearth of new construction projects in central Jerusalem, we do not expect prices to fall. However, with continued global economic uncertainty, we don’t expect prices to rise considerably.

A large number of apartments were sold in Jerusalem in 2022. Many of these deals were actually agreed to in the previous year but, due to covid-related complications, only closed in 2022. With the deal backlog now cleared, there presently is more available supply – though by no means a glut – to accommodate market demand, and we have recently observed a number of fairly priced apartments enter the market. In Beit Shemesh and RBS, we are experiencing similar activity, with more second-hand purchasing options available plus exciting new projects offering favorable payment plans.

For people interested in purchasing a reasonably priced apartment, consider today’s attractive real estate opportunities Israel’s birthday present to you!


Gedaliah Borvick is the founder of My Israel Home (, a real estate agency focused on helping people from abroad buy and sell homes in Israel. To sign up for his monthly market updates, contact him at

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