The wave of antisemitism sweeping the world during the Israel-Hamas war seems bigger and bleaker than those that have come before. Growing antisemitism raises a sense of discomfort in Jewish communities, and sometimes spurs people to consider leaving. The default option, in most such cases, is Israel. So, it is not surprising to hear, once again, about an increase in interest by Jewish non-residents in purchasing apartments in Israel, since the war began two months ago.
This is currently not a massive wave of purchases by Jews living abroad, but for developers, real estate marketers and brokers, it means there is no better time to attract potential buyers from overseas to Israel.
"Antisemitism will push many Jews to buy apartments in Israel," believes Dror Ohev Zion, CEO and owner of residential project marketing and sales agency DARA Project Marketing. "Even if they don't move here right away, they will buy the property, just in case. At present, we haven’t seen non-residents lining up to buy, but people are starting to get interested."
"Right now, investors are examining options"
Ronny Cohen, partner and CEO of Eldar Marketing, agrees that the current trend is expressed mainly on the level of interest. "We sense a 60-70% rise in interest. It’s natural that interest levels should rise, given the present situation. It seems that this time the wave of antisemitism is acute, global, and long-term, but people or families don’t pack up, close their business, and leave in a rush. They’re currently examining the options. I think we'll see the real impact, if it happens, five or six months from now, around April and the Passover holiday. Therefore, the right thing is to do marketing today: get exposure and penetrate the consciousness of potential buyers, so that they’ll become customers, buyers, later on."
"Besides the increase in antisemitic incidents, the stronger dollar also benefits foreign residents here," says Ohev Zion. "As the dollar gets stronger, they have a bigger budget because here in Israel the purchase price is, of course in shekels. So, it’s true that the dollar has dropped a bit recently, but it’s still high, certainly relative to the beginning of the year."
Israel Realtors Association chairman Itzik Levy claims that stronger foreign currencies against the shekel over the past year have generated interest not only from the US: "The value of the shekel has also dropped dramatically compared to the euro and the pound sterling, and this in general is an incentive to buy apartments in Israel".
"Even when a crisis arises, as is happening these days because of the war, real demand comes after marketing activities are launched around the projects", adds Ohev Zion. "The real estate fairs abroad are usually held where there are large Jewish communities, and attended by Jewish families interested in buying, or ex-Israelis who want to come back to Israel. We meet them there, bring relevant materials, present them with projects and apartments, make the initial contact, and then continue from Israel, until they come here to physically make the purchase, although this also often happens via a family member or a professional here in Israel who supports the process."
"We usually operate intermediaries who have contact with parties abroad and know how to bring the customers to us," says Racheli Brizel, VP Marketing & Sales at Ashdar Building Company of the Ashtrom Group (TASE: ASHG). "We’re currently investing more effort than before to prioritize apartments for non-residents. In the past, we used to go to fairs abroad, but we no longer do that. If there’s a foreign resident who is interested but can’t get to us, the materials we send are more attractive and accessible in terms of the apartment appearance, size, etc. They will be able to take a virtual tour of the property, look at very detailed plans of the apartment, get an impression of the view, and more. And so, they get a good picture before the purchase."
Using what the community offers
Deborah Michael, is an immigrant to Israel from Chicago, and an independent real estate agent who also brokers between foreign residents and projects in Israel. During the war, she has negotiated a deal between a couple from New York and the Ram Aderet group for the sale of a penthouse in the MY ADERET project in Kiryat Gat’s Carmei Gat for NIS 3.05 million. "I do everything from Israel, virtually," she says. "Unless the clients live in Israel or are visiting, then we do it face-to-face, of course.
"Jewish communities outside of Israel, in many cases, are centered around a synagogue. The value of the apartment is determined by its proximity to the synagogue. After prayers, people don’t rush home, as they do in Israel, but stay for kiddush, socializing with each other. Diaspora Jews who make Aliyah want to replicate this type of communal structure.
"The needs of Jews from abroad to belong to a community, with all its social and support functions, forms the basis of our marketing efforts. Once a critical mass of buyers from abroad have purchased units in a specific project, it becomes a real selling point. One example is a project in Jerusalem's Katmonim neighborhood, where very few American Jews live. Because I’m familiar with community needs, I was able to fill an entire apartment building with new immigrants from the US.
Dror Ohev Zion says the religious communities will be interested mainly in the Jerusalem area, and also in Beit Shemesh where there is a large ultra-Orthodox community. "Recently, there has also been interest in Kiryat Gat for the same reason: a relatively large Haredi community has developed there, and it has connections with communities abroad, and thus a relatively large number of non-residents have been arriving there recently. The more secular communities are looking for apartments in the Gush Dan area and along the coastline: Tel Aviv, Bat Yam, Netanya, Ashdod and more."
Cohen suggests another course of action: "It’s good sometimes to conduct an activity among community leaders or persons active from within the community - people who may not be (real estate) brokers by definition, but work in the community, know it well, and in practice act as mediators between the project or developer, and those community members interested in the purchase. After a certain number of people have expressed interest, Zoom calls are usually held in intimate groups of ten to 15 people - a very common thing today in marketing to non-residents - after which we move on to individual calls, and sometimes even come to the potential buyers' homes, or hold an even more intimate at-home gathering with just a few people. The sale is usually made there, or a 'match' is made between the project developer and the family representative in Israel, who closes the deal in-person here.
"Sometimes there are fairs held with the participation of several entrepreneurs who present their merchandise, and sometimes also with the participation of several communities together. Although today it’s easier to do these things remotely, there are still those who’ll physically travel to the communities themselves, even at just the interest stage - usually if there’s enough buyer potential in that community, and if there is trustworthy oversight. It doesn’t happen very often anymore, but it still happens."
Levy is expected to travel to Mexico in mid-January, along with the former rabbi of the community, to market a 400-unit urban renewal project in Jerusalem, developed by the Berger Group. This trip follows the sale of 21 apartment units in the Foreign Ministry Quarter, a project of the Aviv Group and Leny Group, the two made to the same community a year ago.
"We’re actually promoting a ‘free sale’ of the project through the interest of the members of the community in Mexico," says Levy. "The rabbi, a person whom the community members know well of course, made the connections. His presence makes everything easier, because he conveys credibility - certainly after quite a few people in this community have already bought apartments through him in the previous project. We are planning to hold an event in one of the synagogues or in a hall that we’ll rent for that purpose, and I assume that a few dozen interested people will come. Then we'll follow-up with at-home gatherings and one-on-one meetings, and I think we'll return with some nice deals.
"As far as I'm concerned, it’s a ‘cast your bread upon the waters’ situation, because after the first ones buy, others from the community will join them. This is true not only for Mexico, but also recently I've also noticed a growing interest from entire communities, especially in Jerusalem, Tel Aviv, Ra'anana, Beit Shemesh and Netanya, which want to buy 30 or 40 apartments in a specific project. They don't wait for a few individuals to buy before making a purchase. They do it as a group, and buy dozens of apartments at once."
"The story of the community in Mexico is very interesting," Levy continues. "This is a very well-established community, which buys these apartments to preserve the value of their money. In recent years, they’ve purchased many apartments in the US, and today they believe that prices in Israel will rise, so they’ve decided to buy here - mainly for investment purposes, and not as residences. Sometimes they allocate the apartments to family members who come to Israel to study."
In general, it seems that current interest also comes from places less known to the Israeli market. "Mexico is just one example," says Cohen. "Panama has recently also become a source of interest for Jewish foreign residents. The Jewish community there includes quite a few very wealthy people.
"Bottom line, it's important to get to know the target community in depth. When we sell an apartment in Israel, we know the target audience very well. Abroad, on the other hand, we know some communities well and others we know less. Familiarity with the mentality of each community is critical, so we usually work with contacts from within the community."
Payment plans - "Everyone benefits"
Israel’s real estate market stagnation, which started even before the war due to the increase in interest rates, led many development companies to offer promotions, mainly around payment terms: buying with the 80/20 method - an initial payment of 20% of the full price, and the rest later - and even 90/10 or 95/5 have become very common, along with no linkage to the consumer price index or interest payments. In the past, benefits of this kind were granted just for "special" purchases, and then only to foreign residents, but it seems that now there is almost no distinction made between local buyers and buyers from abroad.
"The market in Israel is very sophisticated," says Cohen. "The payment terms given today were once reserved only for non-residents, because linkage to the index doesn’t apply to them.
Today, these payment terms are huge benefits for buyers, which can reach hundreds of thousands of shekels in the current interest rate environment, so there is no difference between local buyers and non-residents: everyone benefits from these purchases".
"There’s an opportunity here for Israeli buyers as well, but they’re obviously not in the proper mode for that at the moment," adds Ohev Zion. "Perceptive, clearheaded individuals can see there’s an opportunity here. From a business analysis perspective, objectively speaking, Israel is a good investment opportunity. Those who put up only 10% equity can make a very nice profit later on, if prices go up again as everyone predicts they will."
"Ultimately, what attracts foreign residents most when they’re choosing a specific project or a particular apartment, is the right community, a quality building, and a favorable financial deal," concludes Michael. "They also need to be sure they won’t be taken advantage of by various parties throughout the process - sales, construction, mortgages, and more."
Published by Globes, Israel business news - en.globes.co.il - on December 11, 2023.
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