Israeli real estate attracted a record $209 million in foreign investment in May as French and US Jews purchased second homes in the Holy Land.
Foreign investment in real estate made up almost a third of direct investment last month, which totaled $633m., the Bank of Israel said in an e-mailed statement.
"French Jews are mostly buying homes in the coastal towns, like Netanya, Ashkelon and Eilat," said Vered Dar, chief economist at Psagot Ofek Investment House Ltd. in Tel Aviv. "American Jews are buying mostly in the Jerusalem area."
Foreign investment in Israeli real estate has been growing steadily in the past few years, rising to $1.4 billion in 2006 from $1.2b. in 2005, and $800m. in 2004. During the first five months of the year, sales to overseas residents climbed by 22 percent in average monthly terms from last year.
The boom is being fueled, in part, by the fact that property prices in Israel are low relative to those in Europe and the US, Dar said. Anti-Semitism in France has also played a part, with Jews wanting to make sure they have a safe haven, she said.
Foreign investment reached a record $22.5b. in 2006 as investors including Warren Buffett bought Israeli companies, helping to boost the shekel to a seven-year high. In the first five months of 2007, overseas investment totaled $4.8b.
