A lot of people around the world ask me about the Real Estate Prices in Israel and how they can acquire a luxury house, Mansion or an apartment in Israel.
In this guide, you can find all the necessary information you need to know before acquiring an estate in Israel. From Searching, finding and acquiring to the final signature.
Israel is the nucleus for Jewish traditions and culture with the dominant population of the Jews. It is the sole country in the world that has its own unique Hebrew calendar, and the entire race follows it for their works and public holidays. It is favorably located between the southern end of the Mediterranean Sea and the northern end of the Red Sea. The country experiences a climatic condition that is characterized by hot-humid summers and mild-cold winters. Despite having limited natural resources, the country has managed to advance in areas of agriculture and industries. It is indeed one of the progressive and influential nations of the Middle East and south-west Asia.
The current population of the Jewish Nation is around 9 million, and in 2050 this figure is going to touch around 16 million. A steady rise in population is one of the primary reasons behind the soaring demands of housing in Israel. The accommodation must double within these years to meet the requirements of the population. In the time span of the year 2006-2016, there has been a substantial rise in the price of real-estate amidst domestic political uncertainty and security threats. The reports of the Central Bureau of Investigation claims that rates have elevated to 112% within this period. However, in the year 2018, the prices dipped in the first quarter. Though in the second quarter there was again a price escalation in areas like Haifa with prices rising by 2.66%, Jerusalem with the price rising 1.53%, the Southern District with the price rising 1.83%, and the Northern District with rising 0.9%. The prices will continue to increase in the year 2019 as well as predicted by both domestic and international investors in real estate.
Why should you buy luxury real estate in Israel?
There are many reasons for people investing in the real estate market in Israel. The primary concerns highlight all those major areas that have made Israel a champion in the world market. According to the World Economic Forum’s Global Competitiveness, it has been ranked 16th and the World Bank’s Ease of Doing Business index it has been ranked 54th. The startup companies operating are highest in Israel after the USA. Even in the NASDAQ list of companies, it has been able to secure the third-highest position after the USA and China. The country has been positioned 5th in the area of high skilled employment as well. Israel is also serving as the research center for Silicon Valley’s like Google, Apple, Facebook, etc. Even in science and technology, it has made exceptional achievements in spheres like solar energy and irrigation. These factors have indirectly accelerated the demand to purchase a property in Israel.
Different cities in Israel have their own set of advantages, which make them the lucrative options for buying housing over there. The city of Tel-Aviv is the prima facie as it is the financial hub of the country, along with being the headquarters of many hi-tech companies, embassies, and central universities.
Tel-Aviv is an ideal choice for bureaucrats, business tycoons, celebrities and high skilled professionals. The tall rise skyscrapers are equipped with all the latest amenities like fitness centers, swimming pools, lounge, etc. that make a living an enriching experience. A little distance from the regular noise, consider selecting Cesarea, which is home to various minstrel departments is quite popular among VIP businessmen and travelers. Jerusalem is the tourism city of Israel known for its historical importance and is well connected to the rest of the country. The city contributes to the economy through tourism. Therefore we see that the city has attracted many real-estate in the past few years.
What are the Benefits of acquiring real estate in Israel?
As discussed earlier, Israel is a country that is way ahead in terms of development in Southwest Asia and the Middle East. The scientific research and developments are taking place steadily in the whole of Israel.
The startup companies are also blooming the market of Israel. The ease of doing business, global competitiveness are some of the essential criteria that make Israel a suitable place for dwelling.
It seems like the economy of the country goes in the right direction, and Israel becomes a significant power and acts as a Business hub for entrepreneurs.
Additionally acquiring a real-estate in Israel can derive certain other benefits as well. There are times when buyers can target specific opportunities like purchasing a house or an apartment at a lower cost of 10-20%, thereby maximizing the highest Internal Rate of Return and optimizing ROI.
Also, Real Estate Investment Funds are a good way to diversify the risk. One can simultaneously invest in various housing projects and public lands, as these funds offer an inclusive solution to manage their investments. Not all the purchasers of real-estate properties consider it for investment purposes. Some also gain a fixed source of rental income through these properties. In Israel, these returns represent a global average value estimated at 2-7%.
What should you consider before buying real estate in Israel?
In 2014, there have been tax amendments in Israel regarding real estate and property. There are two kinds of tax imposed during the transaction of any property or real-estate. Additional tax and laws are only applicable when the property transaction involves an undeveloped land, an entity or building rights. The first is the acquisition tax that is implied to the purchaser of the property and the second is the capital gain tax, and it is implied to the seller of the property.
The acquisition tax is imposed on the buyer of the property at a marginal rate of 6% of the total purchase price. Besides Capital Gain Taxes are imposed on the seller of the property whenever there is a difference in value between the real price and the current price. The CG tax is charged on the amount of appreciation.
Luxury Homes vs Luxury Apartments in Israel
Luxury homes in Israel give the entire authority of the house to the owner, while in luxury apartments, the owner has the limited right only in his dwelling unit. However paying taxes is much feasible as the money is split among the owners of different dwelling units in the apartment, but the owner of the luxury home has to pay tax for the entire property he owns. From the aspect of privacy, the owner of a luxury home is at an advantageous position compared to the owner of a luxury apartment where he needs to share all amenities with the members of the apartment. The security system is much better in a luxury apartment compared to an isolated luxury home where one needs to invest more for it. If we analyze both the situations, then both of them have their own set of pros and cons.
Luxury Apartments in Israel
The pricing and range of different luxury apartments may vary at different places in Israel. Some of the price ranges in different places are as follows:
A luxury apartment in the Hashoftim tower in Tel Aviv is located in the nucleus of the city next to the Mann Auditorium and the Arts Center on one side and Habima Square on the other. It has three bedrooms, a dining area, a luxurious living room, a balcony, a kitchen, and bathrooms. The estimated cost of this property is around ₪ 14428571 in Israeli currency. A luxurious residential complex in Herzliya Pituach with a beachfront facing cost around approximately ₪ 9837664 in Israeli New Shekel. It has spacious bedrooms, sea view, sun terrace facilities. Other amenities include a swimming pool, gym, underground parking, etc. A luxury flat located at a 10 mins distance from the old Jerusalem city near Mamilla Mall, with 3 en-suite bedrooms, eat-in-kitchen, separate family room, and study room. It costs around ₪ 15990041. Lately, it was reported that there was some negative trend of sales in Herzliya Pituah that you should be aware about.
Luxury Homes in Israel
The price of luxury homes varies from place to place in Israel. It also depends upon the location you intend to buy and invest your money. A real estate might be priced according to the different facilities it offers like gymnasium, pool, terrace, etc. or from the architectural view of the house or apartment. A luxurious private mansion in the city of Netanya with a sea-facing price around ₪ 31756632. A rear-facing beautiful villa on Keren HaYesod Street, Herzliya Pituach incorporates five suites, swimming pool, theatre room, underfloor heating, garden, and an elevator with an area of 926 sq meters cost around 15887301 in Israeli Shekel. An eight-bedroom luxury Villa in Harmor in Jerusalem cost about ₪ 6707832. It has luxurious facilities like a created ambiance of the countryside, huge garden, private entrance, a magnificent view of the valleys, three-level accommodation, etc.
Luxury Real estate agent Israel
The best and safest way to proceed to buy a property in Israel is first you need to check the market prices of these properties online, and then you can finally proceed and search for a genuine real estate agent. Contact an agent after you are sure about the area, prices, and type of property you want to purchase. In Israel, real-estate agents are generally very trustworthy. You must check their credentials and past working experiences before proceeding with them. Besides showcasing prospective properties, these agents also manage the purchasing procedures and contracts. A 2% commission on the price of the real estate is charged as fees of a real estate agent.