Secure your future in Israel with a team that will hold your hand
Julian Nathan, Managing Director of Hold Real Estate in Israel explains how to go about buying a property in the Jewish homeland
Louisa Walters is Features Editor at the Jewish News and specialises in food and travel writing
Since October 7, there has been a 40 increase in aliya applications from the UK. When Julian Nathan and his family made aliya in 2017 he had already invested in a property through Hold Real Estate. “It was a wonderful experience as an investor, and as my relationship with the Hold Real Estate team developed over the years prior to our arrival in Israel. I recognised the potential in helping other foreign buyers invest in the market and so I joined the Hold team.”
Q: What is the first step for someone considering a property purchase in Israel?
Those looking to buy today should first clarify how much they want to invest and for what purpose. Is it purely for investment, or holidays, or will you be living on the property? The next step would be to find a partner who can assist you in finding the right opportunity at the right price. Don’t procrastinate too long, as deals aren’t on the table for long, and demand is growing. If you find a good deal and trust your partner, don’t wait!
Q: How have recent events in Israel impacted Israel’s property market?
Naturally recent events have stirred uncertainty and volatility in the property market, impacting both buyers and sellers. However, the Israeli real estate market remains stable despite global economic turbulence. The resilience of the Israeli economy, along with a thriving property market, underscores its appeal for long-term capital growth. Israel’s real estate sector continues to display remarkable strength, driven by a significant shortfall of housing units amid overwhelming demand. Challenges such as land allocation for development and labour shortages exacerbate supply shortages. Additionally, rising aliya numbers and foreign investment in Israel further drive property prices upward.
Q: Why should investors consider investing in Israeli real estate now?
It’s a great time to invest! First and foremost, the demand for property in Israel exceeds the supply, and even more so since October 7th and the slowdown in construction. Over the past few months there has been increased demand for property from foreign buyers. Additionally, major developers are now offering incentives to buyers who can structure excellent payment terms. With the market’s steady growth and stability, now is an opportune time to explore real estate investment in Israel.
Q: What is the minimum down payment for foreign buyers?
For an existing property, a foreigner would need to fund 50 percent of the purchase price and a mortgage of 50 percent. However, if buying a property that is part of a new development or a pre-construction project, 10-20 percent will secure the deal with linear payments payable during the development cycle. Once 50 percent has been paid, the balance of 50 percent can be funded with a mortgage, which is due on completion. This is how many investors get a foot in the door without having to come up with all the cash at once.
Q: What are the additional costs associated with purchasing property in Israel?
There are additional costs, often referred to as “closing costs”, which are due upon purchasing property, whether it’s a new project or an existing property. The purchase tax for foreigners is typically set at eight percent of the property value and scales up according to the purchase price. A reduction is available for Israeli citizens living in Israel and new immigrants buying their first homes. Other costs include legal fees (1 percent to 1.5 percent + VAT) and realtor/promoter fees (2 percent to 5 percent + VAT).
Q: What is a building index?
This cost only applies to buying a property that is still in the development phase. The building index is government-published; it’s an additional amount the government allows developers to charge on any outstanding funds to protect developers and buyers from fluctuations in building costs over the period of development.
Q: What are the advantages of purchasing in a new development?
Purchasing in a new development offers financial breathing space as payments can be staggered until the project is developed (three to five years typically). Historically, this has been very good for capital appreciation. Buyers have more time to arrange the necessary funds, and developers may offer attractive incentives. If you’re considering property investment and don’t require immediate occupancy, opting for a new development provides the flexibility of additional time to gather the required 50 percent equity needed. Moreover, many buyers appreciate the opportunity to customise layouts and select finishes according to their preferences. However, it’s crucial to ensure you’re dealing with reputable developers whose projects are backed by guarantees from financing banks.
Q: Can buyers purchase property remotely?
Absolutely. The purchasing process, including opening bank accounts and completing mortgage applications, can be completed remotely. Legal representation and power of attorney facilitate transactions.
Q: How do you select the projects that you market and sell?
For close to 30 years, our team has been locating attractive real estate opportunities in Israel, focusing on high-demand and urban renewal areas where we believe long-term capital appreciation will occur.
Q: What income can a buyer expect from renting out the property?
The average rental yield for apartments in Israel typically ranges from 2.5 percent to 3.5 percent. This can vary based on location, property type and market conditions. Some investors may achieve higher yields, especially in high-demand areas or through short-term rentals like Airbnb.
To set up a consultation with Hold Real Estate, email info@hold.co.il or visit hold.co.il/futureinisrael
*The contents of this article are designed to provide the reader with general information and not to serve as legal or professional advice for a particular transaction. Readers are advised to obtain advice from qualified professionals before entering into any transaction.
Thank you for helping to make Jewish News the leading source of news and opinion for the UK Jewish community. Today we're asking for your invaluable help to continue putting our community first in everything we do.
For as little as £5 a month you can help sustain the vital work we do in celebrating and standing up for Jewish life in Britain.
Jewish News holds our community together and keeps us connected. Like a synagogue, it’s where people turn to feel part of something bigger. It also proudly shows the rest of Britain the vibrancy and rich culture of modern Jewish life.
You can make a quick and easy one-off or monthly contribution of £5, £10, £20 or any other sum you’re comfortable with.
100% of your donation will help us continue celebrating our community, in all its dynamic diversity...
Engaging
Being a community platform means so much more than producing a newspaper and website. One of our proudest roles is media partnering with our invaluable charities to amplify the outstanding work they do to help us all.
Celebrating
There’s no shortage of oys in the world but Jewish News takes every opportunity to celebrate the joys too, through projects like Night of Heroes, 40 Under 40 and other compelling countdowns that make the community kvell with pride.
Pioneering
In the first collaboration between media outlets from different faiths, Jewish News worked with British Muslim TV and Church Times to produce a list of young activists leading the way on interfaith understanding.
Campaigning
Royal Mail issued a stamp honouring Holocaust hero Sir Nicholas Winton after a Jewish News campaign attracted more than 100,000 backers. Jewish Newsalso produces special editions of the paper highlighting pressing issues including mental health and Holocaust remembrance.
Easy access
In an age when news is readily accessible, Jewish News provides high-quality content free online and offline, removing any financial barriers to connecting people.
Voice of our community to wider society
The Jewish News team regularly appears on TV, radio and on the pages of the national press to comment on stories about the Jewish community. Easy access to the paper on the streets of London also means Jewish News provides an invaluable window into the community for the country at large.
We hope you agree all this is worth preserving.
