Real Estate in Israel

The real estate market in Israel is one of the most profitable of the world.

Growing domestic and foreign demand for real estate constantly attracts the attention of investors looking for safe and lucrative destinations for their capital. In sharp contrast to the international markets, where moderate recovery remains uncertain, the prospects for long-term growth are promising in the Israeli real estate market.

The revaluation of assets is manifested both in the increase in the real value of rentals, as well as in the lasting upgrading of the properties’ values.

In recent years, government efforts to leverage the supply of properties by state incentives to curb the rise in property values, have been in vain. By contrast, the Central Bureau of Statistics of Israel has shown increased returns for local and foreign investors, creating even greater earning expectations.

The strength of the Israeli financial system, backed by bank reserves and the Bank of Israel's stringent policies for mortgage bankers, places Israel's real estate market in a position of privilege and protects investors from housing bubbles such as those suffered recently by the United States and Europe.

The main advantages for real estate landlords include legal security and tax breaks offered to foreign investors by the State of Israel. Unlike other countries, Israeli law protects owners for the most part, giving them the financial and legal instruments to enforce contractual terms agreed upon with tenants. Furthermore, foreign investors are largely exempt from VAT and income tax when buying their first property and cashing in on their returns.

In Israel, 93% of land is state-owned, and only 7% is in private hands. Population decentralization needs have expanded the horizons of both the housing and construction markets, as they have spread and diversified beyond traditional cities like Jerusalem, Tel Aviv and Haifa.

At present, the expected profitability for investments in new areas of urban development and trade, double and even triple the average return for traditional cities.

Of course, making successful investments in real estate requires knowledge, experience and contacts. Speaking Hebrew and understanding the Israeli mindset is necessary, but not sufficient, for success. An investment in real estate, regardless of its size, requires access to a comprehensive management solution involving all aspects and stages, and includes experience in selecting, negotiating, and safely purchasing the property, as well as undertaking any remodeling, furnishing and rental, if relevant.

Bacalor Strategic Consulting represents the comprehensive solution that your investment requires.

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