The Hebrew word for Real Estate is Nadlan. The Real Estate prices in Israel are extremely high. Despite the ongoing way (from October 7, 2023) and rising interest rates – the prices stay high and only increase every year. Why?
According to Bizportal, in an article posted in May 2024, the real estate prices in Israel are on average 2 million shekels or more. As of today, 3.66 ILS to 1 USD, that is close to $550,000 USD. Is that normal?
The answer is unfortunately yes. The demand to live in Israel is only growing. The high tech sector pays on average over 30,000 ILS per month gross. That is a gross of 5.55 years to reach that price if you factor 2 working people (couple). Even if they don’t work in that sector, a family on average earns that amount together and lower salaries in Israel have lower tax accordingly.
Is there a real estate bubble in Israel?
The short answer is unfortunately no. We say unfortunately because paying for a simple apartment has become extremely expensive. As shown in the picture above, there are lots of towers in Israel due to a growing population, and thus these towers allow many people to live in concentrated areas.
As mentioned in this blog post about the Israeli economy, the Israeli economy is quite reselient, and the financial changes Netanyahu introduced over the years definitely gave the country a big push. How things will unveil from here, once Netanyahu is replaced is hard to tell. However, the government under Lapid and Bennett several years ago didn’t weaken the Shekel. In fact, nothing seems to stop the Shekel, perhaps only Bitcoin is the only currency out there that is currently outperforming the Shekel.