Real Estate - Israel | Statista Market Forecast

The Real Estate market market in Israel is expected to reach a projected value of US$2.69tn in 2024.
Within this market, Residential Real Estate holds the dominant position, with a projected market volume of US$2.18tn in the same year.
It is anticipated that the market will experience an annual growth rate of 5.21% from 2024 to 2029 (CAGR 2024-2029), resulting in a market volume of US$3.47tn by 2029.
When compared globally, United States is expected to generate the highest value in the Real Estate market sector, with US$132.0tn in 2024.
Despite geopolitical tensions, the Israeli real estate market continues to attract foreign investors due to its strong economic growth and stable property values.

Definition:

The real estate market refers to the transaction of properties, including residential properties (such as houses and apartments) and commercial properties, such as office buildings and industrial properties. Apart from property sales, this market includes leases and the value of real estate.

Structure:

The real estate market comprises residential and commercial real estate. The residential real estate market covers real estate transactions and leases, and residential real estate leases are divided into apartment and house leases.

Additional information:

The market contains the following KPIs: real estate value aggregated for all countries and regions, average real estate value, real estate transaction revenue, number of real estate sold, number of leased and owned real estate, average room per resident, and dwelling type shares. The dwelling type shares comprise the share of the population that lives in houses and apartments. These shares are displayed for real estate owners and real estate renters as well.

Residential real estate (houses and apartments)
Commercial real estate (office buildings, retail spaces, warehouses, industrial properties)

Real estate agencies
Construction companies
Accommodation services, such as Airbnb
Commercial real estate leases and transactions
Publicly owned buildings used by the local government
Buildings used for public health care services

The Real Estate market in Israel has been experiencing significant growth and development in recent years.

Customer preferences: One of the key customer preferences in the Israeli Real Estate market is the demand for high-quality properties with modern amenities. Customers are increasingly looking for properties that offer convenience, comfort, and a range of facilities such as swimming pools, gyms, and landscaped gardens. Additionally, there is a growing preference for properties located in prime locations, close to business centers, transportation hubs, and recreational areas.

Trends in the market: One of the major trends in the Israeli Real Estate market is the increasing demand for rental properties. This trend can be attributed to several factors, including the rising cost of homeownership, the flexibility offered by renting, and the influx of young professionals and students who prefer renting over buying. As a result, there has been a surge in the construction of rental properties, particularly in urban areas. Another trend in the market is the growing interest in sustainable and eco-friendly properties. With increasing awareness about environmental issues, customers are showing a preference for properties that are energy-efficient, use renewable materials, and have sustainable design features. This trend is driven by both customer demand and government initiatives promoting sustainability in the construction sector.

Local special circumstances: Israel has a unique geographical and cultural landscape that influences the Real Estate market. The country's limited land availability and growing population density have led to a high demand for housing, especially in urban areas. This has resulted in increased competition and rising property prices. Additionally, Israel's diverse population, which includes both local residents and immigrants, contributes to a diverse range of housing preferences and requirements.

Underlying macroeconomic factors: Several macroeconomic factors have contributed to the development of the Real Estate market in Israel. The country's strong economic growth, low unemployment rate, and stable political environment have created a favorable investment climate. Additionally, low interest rates and government subsidies for first-time homebuyers have stimulated demand for properties. Furthermore, the influx of foreign investment in the Real Estate sector has also played a significant role in driving market growth. In conclusion, the Real Estate market in Israel is experiencing growth and development driven by customer preferences for high-quality properties with modern amenities, the increasing demand for rental properties, and the growing interest in sustainable and eco-friendly properties. The local special circumstances, such as limited land availability and a diverse population, also contribute to the market dynamics. Moreover, underlying macroeconomic factors, including strong economic growth and low interest rates, have further fueled the market's expansion.

Data coverage:

Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

The global housing market has slowed amid high inflation and soaring borrowing costs. Homeownership is one of the most universal signs of success and prosperity: It serves both as a source of stable and secure housing and a long-term investment. After the global financial crisis, property prices rose in many countries and especially in advanced economies. For more than a decade after that, the housing market has been on an upward trajectory, culminating in the housing boom during the COVID-19 pandemic. However, housing shortages in highly competitive markets, the recent rapid house price growth, soaring inflation, and consequently, some of the highest mortgage interest rates recorded in the past 10 years have led to the market cooling.

Japan is a country with very limited space for buildings, as mountains make up about three-quarters of its landmass. The country’s fairly large population is concentrated in major cities. The metropolitan area of Tokyo, home to a staggering one-third of the population, is the center of economic and political activity. As such, it boasts the highest property prices across the country. Driven by the weak yen, a tourism boom, and global investment, property and land prices surged in 2023 and 2024. Even some rural regions, which are generally confronted with economic stagnation and depopulation tendencies, have been affected by this trend.

The real estate market all around the world has been affected by the global pandemic. This historic event has changed the way we live, consume, and work. The real estate market in the Asia-Pacific region has experienced some turbulent and diverse changes depending on the sector, property type, and location. The commercial real estate segment, which includes offices, retail outlets, logistics centers, and many more, had to adapt to new conditions and demands. Furthermore, residential real estate suffered decreases in rental and capital values in some areas, with the exception of prime real estate, which experienced healthy growth in most locations.

Soaring inflation and aggressive mortgage interest rate hikes cooled the European housing market after a nearly decade-long period of growth. Since 2015, house prices in the European Union have grown by about 50 percent. When inflation in Europe started to rise at an alarming rate in 2021, the European Central Bank increased interest rates, resulting in substantially higher mortgage interest rates and a decline in homebuying. But how important is homeownership for Europeans?

Real Estate - Israel

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