Why is the Real Estate Market Booming in Israel During a Pandemic?

0
180
7 Hess Street

By: TJVNews.com

While in the states and Europe the operations against COVID-19 are in their basic to medium stages–in Israel, where over 70% of the potential population were vaccinated–social life and businesses are gradually returning to prosper.

Oren Cohen, CEO and founder of Oren Cohen prime real estate, located in Rechavia, with over 25 years of experience in Jerusalem’s high-end market, explains the effects felt in Israel in this period.

The Courtyard on Iben Shafrut, Rehavia

“The story starts half a year back,” says Oren, “the re-ignition of the property market (with over 62,000 properties sold in Israel over the second half of 2020, the highest in the past 20 years)–was a direct effect of the declaration of the treasury office in July 2020 to reduce the real-estate purchasing tax, which mainly attracted business opportunities. The current new wave is majorly affected by the general population that clearly understood the new needs of a pandemic crisis–properties with a garden or a balcony is now a ‘must’”.

“A similar change in the mindset is currently undergoing in the States” adds Oren, “while US Jews were majorly involved with property investments in Israel for business purposes, or holidays vacation apartments–we now find more and more interest amongst the greater crowd to purchase houses that could fit their own needs, to allow them to potentially move in for a few months during a potential world crisis.

This change directly affects the location demand of the property–if in the past the main criteria were the profit regardless of personal location preferences–the interest now is more focused on location and community, mainly in Jerusalem’s classic Anglo-Saxon locations. They too are well aware that a balcony or a penthouse is very much a need.”

Oren shares with us that the purchasing habits have changed too: zoom meetings and virtual tours of the property have become more and more popular. In other words–the local Israeli’s advantage of being geographically located within driving distance to the property–is much less felt, customers from the states and Europe have an equal chance to the Israelis in observing the property.

“What we see from the above is a major increase in demand, but unfortunately the supply is not increasing in accordance. Besides the fact that Israel’s most valuable natural resource is its limited landscapes (therefore the ground sold to citizens is in a very slow paste)–a new report presented last week to the government by the ‘Association of Contractors Builders of the Land’ reveals that by 2048 (100 years to the declaration of the state of Israel) there will be a need to provide a living to over 18 million Israelis and Olim Hadashim, practically that means that there is an immediate need to plan the future of housing in Israel with over 3 million new properties to be built within the next 27 years.”

The President’s Gardens

With the above facts said–it is clear how the latest research of Australia’s ‘Compare the Market’ stated that a square meter in Israel costs over a quarter of the average monthly income in Israel – rating the Jewish state second most expensive place to live in the world for the locals.

The government is well aware of that and is ongoing a major program of subsidizing the cost of the first property of young Israeli families, mainly in the suburbs. Unfortunately, it is now well known that the plan isn’t effective in moving these families away from the strong central locations of Jerusalem, it rather makes it easier for them to carry on paying their rent while having an extra income from their subsidized apartment they are letting elsewhere.

What this means is that finding a property in the highly wanted areas become even more difficult to find–hence due to the local Israelis looking to find properties with balconies and gardens, with local markets and shops nearby, and hence due to Jews from all over the world looking into creating for themselves a potential place to live in case of world crisis.

Oren shares with us a few examples of recent deals during Covid time.

“In the Courtyard on Iben Shafrut, Rehavia- a landmark building from the 1930’s which was recently restored 3 units have been sold through zoom to clients from the states.

On Hess street in Talbia, between the Waldorf Astoria and the King David hotel, 2 units was sold, so too the “President’s Graden” in Rehavia- a boutique building of 11 tenants with preserved facades on the corner of Abarbanel street, 4 units were sold during Covid time”.

“These buyers were wise and reserved themselves high-end units knowing that the supply is limited, and prices will soon rise”, says Oren.

“In these days we are launching new projects in some of the most prime locations in Jerusalem and Tel-Aviv, that were mainly planned and design for foreign client’s needs and demands, and we are looking forward to meet them all face to face in the post COVID time in the very near future” finalizes Oren.

For further information please contact Oren Cohen at +972523353569 or by e-mail at: [email protected]