Real estate sales to overseas buyers up in 2008, but demand slowing

Real estate broker: "I believe fall is temporary. Demand will pick up again once the crisis ends."

By JOHN BENZAQUEN
Raanana home 88 248 (photo credit: Anglo-Saxon)
Raanana home 88 248
(photo credit: Anglo-Saxon)
Demand for real estate from overseas buyers rose 10 percent in 2008, but demand is set to drop, according to a recent survey by Anglo Saxon Real Estate Brokerage. Demand was up in the first half of the year and then gradually fell during the second half, the survey found. Anglo Saxon attributed the rise in overseas demand for real estate to increased interest from Australia, South Africa and Canada, which offset a fall in demand from the UK and France. In 2007, purchases from the UK and France accounted for 47% of foreign real-estate transactions; by 2008, it had fallen to 30%. Purchases by Canadians, South Africans and Australians, which in 2007 accounted for 15% of sales to overseas buyers, rose to 25% in 2008. "Demand from overseas buyers in 2008 rose in general," Anglo Saxon general manager Adina Hacham told The Jerusalem Post. "But in the last months of the year, demand has fallen, and I'm afraid this trend will continue through 2009." Americans, who are mostly religious, tend to buy in Jerusalem and the surrounding area, especially Beit Shemesh, she said. The British, who tend to be more secular, like Ra'anana and the coastal plain, while the French prefer Ashdod, Ashkelon and Bat Yam, Hacham said. According to Joe Cohen, a real-estate broker in Ra'anana, a sharp drop in sales to overseas buyers is expected in 2009. "We are experiencing a big economic crisis, a terrific credit crunch," he told the Post. "It stands to reason that in such a situation, demand for real estate will fall - not only from overseas customers, but from locals as well. But I believe the fall in overseas demand is temporary. Demand will pick up again once the crisis ends." Interest from French Jews is constant because they feel threatened in France, Cohen said. Demand from elderly Jews from English-speaking who want to retire in Israel, and from wealthy families who want to own a second home in Israel, is also strong, he said. The current fall in demand will have a negative effect on the real-estate market in general, but it will have a much larger impact on homes that cost $1 million, Cohen said.