Israel’s housing market and the Indian construction workers keeping it afloat

Laborers from India have been replacing their missing Arab counterparts in the wake of a ban on Palestinian workers in Israel since the Hamas terror attack on southern Israeli border communities on Oct. 7, 2023.

The challenge of keeping up with the demand for housing for Israel’s fast-growing population has been exacerbated by the lack of Palestinian builders.

Israel is being built up at a remarkable pace. Cranes are a constant feature of city skylines, but the workers are now speaking a different language. A large proportion of Israel’s construction work has been undertaken by Arab builders from the Palestinian Territories, but since last year's brutal attack, a ban has prevented Israeli companies from employing workers from Judea and Samaria (the West Bank). 

While a disaster for Palestinians in the building trade, Indian workers have gladly picked up the slack.

The Associated Press posted the story of one worker from India named Raju Nishad on 𝕏: "Wearing a safety belt, helmet and work boots, Raju Nishad navigates the scaffolding, hammering blocks that will form part of a building in a new neighbourhood in Beer Yaakov, Israel. He and other Indians are part of an Israeli government effort to fill a void left by tens of thousands of Palestinian construction workers barred from entering Israel since Hamas's unprecedented Oct. 7, 2023 attack."

The Times of Israel reported how Nishad (35) was not concerned about coming to Israel even while it was under attack from seven fronts. Indian workers can make three times the amount they would back home.

“There’s nothing to be afraid of here,” he said, even though he has had to run for shelter during several sirens. “Once it (the siren) stops, we just resume our work.”

He added, “I’m saving for the future, planning to make wise investments and do something meaningful for my family.”

According to the Times of Israel, Eyal Argov of the Central Bank of Israel said that before the Hamas attack, around 80,000 Palestinians, mostly from the West Bank, were employed in construction, along with some 26,000 foreigners.

A year later, Nishad is one of only about 16,000 people from India who have come to work in Israel over the past year. However, many more are needed and the recruitment drive is in full swing.

A Delhi-based recruitment agency, Dynamic Staffing Services, has sent about 500,000 Indian workers to more than 30 countries, including over 3,500 to work in Israel. Its chairman, Samir Khosla, came to Israel himself a month after the Oct. 7 attack in response to Israel’s appeal for workers.

“We didn’t know much about the market, and there wasn’t an incumbent workforce from India here,” Khosla said. “We really had to move around and understand the needs,” he said.

Khosla hopes to bring an additional 10,000 skilled Indian workers across all trades and believes his country is a very suitable match given the “excellent relations” between the two countries.

With only about 30,000 foreigners employed in the industry, the drop in numbers has been dramatic for Israel's building sector.

According to Argov, building activity in the last quarter of 2024 is about 25% below pre-war levels. Even with the Indian workers, he cautioned, “These numbers are still very low.” 

With demand growing faster than supply, it could create problems for the housing market down the line. While there is no imminent crisis, Argov said there may be a delay in providing enough housing to meet Israel’s needs.

“Israel has a growing population, increasing by two percent annually, and this delay might lead to some shortage in the future.”