Foreign demand for Israeli real estate surges amid war and global antisemitism

The Israeli real estate market for many years has attracted Diaspora Jews who wish to buy a second home in the State of Israel. However, the ensuing war following the Hamas Oct. 7, 2023, attack and the rise in global antisemitism are fueling an increased interest in Israeli real estate among overseas clients.

While some foreign buyers view Israeli real estate as an insurance policy amid uncertain times, others plan to eventually relocate to the Jewish state. Cities like Jerusalem, Tel Aviv, Herzliya and Netanya remain the most desirable locations among international clients. 

Nisim Nichko, head of the Private Banking Center in Tel Aviv at Bank Jerusalem, told the Ynet news outlet there is a growing international demand for Israeli real estate. 

"In the past year, we’ve witnessed growing interest in taking out mortgages for the purchase of residential apartments in Israel, especially due to the war and the wave of antisemitism sweeping through Europe and the United States. This is reflected in laying the groundwork for real estate transactions," Nichko assessed. "The value of mortgages taken by foreign residents has increased by over 100%."

He further noted an increase in transfers of international funds for acquiring real estate in Israel, a trend that he believes will continue in 2025. 

"Foreign buyers contact us through lawyers or their representatives in Israel to open accounts for transferring equity for real estate transactions. In recent months, this has translated into actual deals – funds are being transferred, and demand for mortgages is growing. In 2025, this trend is expected to become even more significant."

The Israeli housing market is characterized by domestic demand that exceeds the limited annual supply. This, combined with increasing international interest in Israeli real estate, has led to a surge in prices for the limited number of homes available.

The Oct. 7 attack also resulted in a slowdown in construction as the Israeli housing market is heavily dependent on Palestinian Arab workers who have been barred entry after the Hamas massacre. The Israeli government has addressed this manpower shortage by inviting thousands of Indian construction workers to Israel.

While many young Israeli families are struggling to afford a home, Nichko noted that foreign buyers and Jews who immigrate to Israel enjoy significant financial benefits. 

“Foreign buyers can receive up to 50% financing, but if they make Aliyah (immigrate to Israel), they can receive up to 75% financing for a first home. Some conduct purchases through foreign or Israeli companies as part of real estate activities, bypassing regulations applied to private buyers, and can receive financing of up to 75%. These are more complex transactions, which is our area of expertise," the senior bank official stated. 

Meir Vider, CEO of Vider Mortgages, has also noted a sharp increase in Israeli real estate interest among foreign clients. 

"In recent years, the mortgage market in Israel has garnered growing interest from foreign residents, who approach local banks to finance real estate purchases. One of the standout trends in 2024 was the significant growth in the number of mortgages granted to foreign residents – an increase of approximately 37% compared to 2023," Vider told Ynet.

"This trend reflects a major shift in the local real estate market, with more foreigners viewing it not only as an investment opportunity but also as a safe haven during periods of global uncertainty,"  

Looking ahead, Vider predicts that the international interest in Israeli real estate will continue in the foreseeable future. 

According to recent trends, Israel’s real estate market has become increasingly attractive to foreign investors. The rise in mortgage approvals for non-residents in 2024 signals a continuation of this growth.

As Vider explained, "Based on current trends and the surge in mortgages granted to foreign residents in 2024, this growth is likely to continue in the coming years."

This sustained interest suggests that foreign buyers see Israel as a lucrative investment hub, with opportunities that could further drive mortgage issuance.

"Foreign buyers will continue to view the Israeli real estate market as an attractive investment opportunity, and the opportunities in this market may lead to further increases in the number of mortgages issued," Vider added.

Beyond mortgage growth, Israel's standing as a global real estate hotspot is becoming more solid. This trend has placed the country among the world’s most appealing destinations for international property investment.

"The rise in the foreign nationals’ mortgage market positions Israel among the leading countries where real estate is an attraction, not just for local investors but also for international ones."