Purchasing real estate in Israel during COVID - A growing phenomenon

The coronavirus pandemic has seen people turn to more conservative areas of investment.

Advocates Aryeh Rachlin & Jane Olman (photo credit: SARAH RAANAN / RACHLIN-OLMAN LAW OFFICES)
Advocates Aryeh Rachlin & Jane Olman
 As in previous times of economic uncertainty, the current COVID-19 pandemic has seen people turn to more conservative areas of investment to protect their savings. Real estate, the traditional safe haven in uncertain times, has again become a focus of attention at a time when stock and equity markets are perceived as carrying higher risk.
For many, this new investment objective has created the incentive to realize a dream which may have remained dormant for many years: purchasing a property in Israel! In addition, the shift to remote employment arrangements has opened up aliyah opportunities for many people who previously would not have considered the move until after retirement. 
Despite recent difficulties foremost non-Israeli citizens to visit and personally inspect a house or apartment, the second half of 2020 and beginning of 2021 has seen a significant increase in the number of properties purchased by foreign residents. This trend, though counterintuitive, can partially be explained by the decision of the Israeli government to lower real estate purchase taxes for foreign residents in 2020, but clearly other factors are also at play. The most compelling explanation, in our opinion, is the historical return to real estate investment in times of economic uncertainty combined with a newfound openness worldwide to conducting business from afar and with minimal physical interaction.
Traditionally, most purchasers would not be willing to make such a significant investment without actually being present to inspect the property personally. Today, however, technology facilitates the ability of purchasers to inspect a property to their satisfaction, and as a society, we are much more comfortable relying on this technology. It is no longer uncommon for purchasers to visit apartments with their real estate agents by Zoom, visiting and revisiting rooms, coming back at different times of the day, taking measurements, checking exposures and sunlight and even participating in neighborhood walk-throughs to familiarize themselves with the local amenities. 
The availability of native English-speaking real estate agents, lawyers, mortgage brokers, structural engineers, surveyors and property managers enables purchasers to put together an experienced team of professionals to guide them through all aspects of the purchase. Professional references from personal contacts in Israel or on websites which serve the English-speaking community are easily obtainable, providing comfort that the choices being made will lead to a smooth transaction, free of unwelcome surprises.
Others have concluded that buying a new construction apartment “off plans” mitigates the downside of not being able to inspect a property personally. The customary 18 to 36-month construction period dovetails nicely with the current inability to visit Israel. These purchasers also take advantage of the opportunity to work with local, English-speaking architects and interior designers to create their apartment in their own vision, upgrade the developer’s plans and specs, and come away with a custom-built property tailored to their needs.  Many new construction projects offer attractive payment plans which can also be partially funded by mortgage funds from an Israeli bank. Qualified foreign residents are currently able to obtain financing of up to 50% of the value of the property. 
In many ways, the purchase process is actually easier today than in previous years. Even with the current easing of entry restrictions, not all potential buyers are able or ready to visit Israel in the near future. Executing a power of attorney for your lawyer, as well assigning documents that enable the creation of a trust account to facilitate payment of all related purchase costs, can now be done from the comfort of your living room or office, obviating the need for time-consuming trips to the closest Israeli consulate.  
Purchasing real estate in Israel from overseas has become a realistic alternative for a growing number of people. The increasing number of available tools and services (both online and personal) have given people the confidence to make their dream of a home in Israel a reality.
Rachlin-Olman Law Office is dedicated to helping English-speaking clients in Israel and abroad navigate the complexities of the Israeli legal system and realize their dreams. The firm offer decades of experience, personalized service in English, and deep familiarity with Israeli business culture. They can be reached at office@rolaw.co.il or on +972-2-2651522. See our website at: www.rolaw.co.il