Real Estate Market Heating Up - Invest in Israel

Renovation, new construction and marketing of apartments in Tel Aviv and the central area are recovering - come invest in Tel Aviv real estate.

Two weeks ago there was a real estate sales fair in the Tel Aviv fairgrounds. A building company was selling 200 apartments at 20% discount. The fair was reported in the news but not advertised to the general public. It was only for security system employees (IDF, IAI, IMI, etc.) - Why would a builder sell apartments to a special group and do it quickly?
In the Globes newspaper there is an advertisement for a "Israel's Luxury Real Estate and Investment Exhibition" (Sunday August 16, Dan Hotel Tel Aviv). Why would a group of builders and realtors take a day to show off their high-end products? There is a pattern of builders and realtors pushing buyers and make deals. The economy here is slow but has not been hit by the likes of the US sub-prime crash or the Wall Street financial troubles. There was a spurt of building management work for Israeli companies in eastern Europe and Africa during 2002 to 2005. The French bought apartments of speculation during the Paris riots. But the real estate sector in Israel has been on a snooze. Builders want to build but buyers are afraid.

Overall the Israeli economy has been puttering along. No ups and no downs in real terms. But the fear in the market is real. People still read newspapers and watch TV. The pictures of abandoned almost new houses in California and Bernie Madoff being lead by police does not make for a happy home buyer [NY Times]. But the reality on the street is different. Israel finally has quiet along it's borders. The military industries targeted by builders are selling drones at a good clip. High tech sector is not bleeding workers like in 2008 and some stocks are actually up. The Tel Aviv stock exchange is back from a fall at a valuation equal to pre-crash days. The IDF has the lowest number of soldiers deployed in the territories in 40 years. The Israeli Shekel is up and even Stanley Fischer can't get it down. All sounds like good news - RIGHT? RIGHT!

But people do not buy houses just on good news. They don't buy when they are worried. Or when they hear bad news from all over the world. The problem in Israel is that we always hear bad news from all over the world. That's the news that makes it into the papers and TV. Besides a tightening of the credit by banks, there is no real bad news here. At least none that should affect the housing market. This is what builders are counting on. But no bad news is not enough. So builders are marketing hard with all kind of advertising and gimmicks. A builder in the suburbs is offering a car with every apartment. If you need to get to your job in the city and you want to live 45 minutes away from the city: you should have a car. The average discount on new homes is 5%. But there are rumors of 6 to 8% on slow selling apartments. The areas outside Tel Aviv tend to see this pattern. In the city itself apartment prices have not gone down. Rentals are also holding up and maybe even going up.

Israel's Luxury Real Estate & Investments Exhibit full page ad in Globes Real Estate section