Foreigner's guide to property market: Quiet times

During this period marked by uncertainty in Israel, the US and Europe, many people are apprehensive to invest in real estate.

By LYLE PLOCHER
property 521 (photo credit: Marc Israel Sellem)
property 521
(photo credit: Marc Israel Sellem)
When it comes to understanding the current real estate market in Israel, it is necessary to look a little deeper than that day’s newspaper headlines. An analysis of the different segments of the real estate market is very necessary at this moment in time.
Between those individuals who were pre-occupied with following the debt-ceiling crisis in the US and those following the tent protests sweeping the country, the real estate market in Israel has quieted down. During periods of uncertainty, oftentimes people do nothing. During these current quiet times, marked by uncertainty, in not just Israel, but the US and in Europe, many people have done just that, nothing!  Does that mean the real estate market in Israel is in trouble?  I don’t think so!
How the different segments of the market work
In order to better understand the current market, it is necessary to analyze the different segments of the market. For example, what is happening with apartment sales activity in the big cities versus outlying areas, what is happening with rents in these two different segments?  What is happening with the luxury home market versus the entry-level market?  What is happening with small dwellings versus larger dwellings?  What is happening with that portion of the real estate market that tends to see just Israelis buying property as opposed to foreign people?  It’s obviously going to be more beneficial information if you are analyzing the segment of the market which you will be potentially participating in.
In analyzing the effect of the tent protests for example, the complaints from this group of people are directed at making housing in Israel more affordable for those who live here on a permanent basis. The government’s efforts to help this segment of the public will have very little effect on the price that a foreign person will pay for an apartment. The foreign person buying his second home in Israel is not going to qualify to meet the government’s income standards in order to be eligible for “affordable housing”.  The people who are looking for “affordable housing” have not been looking at apartments in Israel that sell for half a million dollars or more.
The foreign segment of the market
For those foreign residents who are trying to get their bearings again after the debt ceiling crisis and consequent stock market volatility, you may find that you have to pay equal attention to what’s happening to the value of your money as you do to Israel real estate prices. For those who are seriously thinking about a property purchase in Israel, it might be advisable to establish a relationship with a reputable real estate agent in Israel who can keep you informed about “good deals”, because the one certain thing at this point is that many sellers may be more flexible with their demands than they have been for the last few years. 
The other benefit to getting your information about the market from a reputable real estate agent or a property appraiser is they can obtain the most recent sales information for you for properties that have sold in the area you are concentrating on.  News reports of prices, on the other hand, are typically dated information, from the previous month or previous quarter and are much more general in nature in terms of average prices for a whole city as opposed to recent actual sales prices in the neighborhood you are focusing your property search on.
 
Lyle Plocher is the Director of Buy Property In Israel and can be reached by email at lyle@buypropertyinisrael.com.
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