Expert: European Terror Having Expensive Impact on Israeli Real Estate

YERUSHALAYIM -
Construction of new residential buildings in central Tel Aviv. Photo by Miriam Alster/FLASH90
Construction of new residential buildings in central Tel Aviv. (Miriam Alster/Flash90)

Although it’s barely been a week since two major terrorist attacks hit Europe, experts are already feeling the effect on Israel’s real estate market. Speaking to Israeli business site Bizportal, Eran Cohen, a housing expert who is the former head of the organization responsible for official home appraisals in Israel, said that in just the past week, demand for information from European Jews about housing in Israel has skyrocketed.

“Over the past week we have received many requests for information about housing, especially in Tel Aviv and other coastal cities like Herzliya, Netanya, Ashdod, and Bat Yam. In addition, there were many inquiries regarding cities with large immigrant communities, like Ra’anana, Ramat Beit Shemesh, and to some extent Yerushalayim.”

Most of the inquiries were from Jews in Belgium, France, Germany, the Netherlands, and Italy, although there were also numerous inquiries from the U.K., he said. “We’ve seen this pattern emerge before – a sharp rise in requests for information about available properties after a terror attack, such as those in France several years ago.”

While things tend to calm down after quiet is restored, each new wave increases the number of people who buy properties, he said, to the extent that last year, 10,000 new immigrants came from France, many of whom bought apartments.

“Many Europeans are buying apartments in our project and from what I hear from other contacts, in many projects across the country,” says Yehuda Goldschmiedt, Head Sales Manager at Jerusalem Heights, to Hamodia, “much more than Americans. What I hear from them when buying is that while they would prefer to stay in their native countries, they would like to have ‘pas besalo,‘ a viable option on the cards, for anything that may arise.”

Last year, there were about 30,000 European immigrants altogether to Israel, and this year that number is expected to grow to 35,000 or even 40,000 – 15,000 from France and 25,000 from the rest of Europe.

Currently, there are 1.1 million Jews in Europe, about 500,000 of them in France, 400,000 in the U.K., 120,000 in Germany, and the remainder spread throughout the rest of the continent. The new immigration will mean new pressures on the Israeli real estate market.

“To accommodate these immigrants the market is going to have to produce between 10,000 and 12,000 additional units in the coming years, and the pressure on an already undersupplied housing market means that prices will continue to rise, especially in cities favored by immigrants, such as Tel Aviv, Yerushalayim, and the coastal cities,” said Cohen, adding that the increases would also be felt in less popular areas, as native Israelis who want to buy homes seek them in places further afar, increasing demand there as well.