Top Property Investment Destinations of Israeli Investors

Research conducted at TLV Expo in Tel Aviv attempted to study the motives, preferences and priorities of Israeli investors engaged in overseas real estate activities.
The research featured participants from various sectors of the real estate industry, including corporate and private investors, fund managers, high net-worth individuals, project developers, consultants and agents, covering Israeli based investors who had invested in at least one overseas property during 2011. Unlike many European real estate investors, Israeli investors demonstrate lower interest in purchasing leisure properties, but rather view real estate as a yield baring investment channel, with an average expectation of at least 7% annual yield.
Residential and commercial properties are considered as the most interesting vertical investment opportunity. Focusing on urban centres is dominant across the board, with belief that city centres with ongoing tourist activity lowers perceived risks in overseas investment.
With many uncertain factors involved in international investment, the fear of empty properties with maintenance costs continue to take its toll as the top international investment barrier.
Top investment destinations for Israeli investors are:

1. New York City
2. Berlin
3. London
4. Barcelona
5. Greek islands

New York led the list due to strong belief that the US market in general and NYC in particular will continue to demonstrate strong demand for rental and commercial property. Direct flights and lack of language barriers as well as a traditional good relationship with the US, were the top positive factors affecting the choice. The multifamily residential market and university expansion, along with Technion and Cornell's win in building a two-million square-foot campus on Roosevelt Island, drew positive attitude toward investment in this market.

Berlin is perceived as under priced, with high yields on rental properties. The robustness of the German economy was one of the top factors which affected the choice. Direct flights and positive attitude toward Israelis have also encouraged investors to operate in this market.

London is popular with direct flights, strong business ties, familiarity with market trends and the Olympic games.

Barcelona is a relatively new investment destination for the Israeli investor seeing record-breaking numbers of incoming tourists from all over the world. Together with price reductions due to Spain's economic crisis, Barcelona is perceived to offer great returns mainly through short term rentals on small apartments in the city centre.


There was no comment reported on the rational behind investment strategy in Greece.


The insight behind the Greek Islands is that the geographic proximity of Greece to Israel is a factor (1 hour flight from Tel Aviv to Athens) and the financial crisis in the Greek economy represent an opportunity as less people can afford buying a house and rental volume will rise.
Since Israelis cannot plan on family vacations in the shores of Sinai (in Egypt) the next closest destination is Greece, so families can rent a villa or an apartment in a condo during the spring to autumn seasons. The winter in Greek islands is still warmer than Northern Europe or Russia, so during that period of the year tourists from these regions may be interested in vacation property rentals. Short term rentals are very profitable for property owners; according to a representative of TLVexpo.com