Resilience and Recent Trends
Since October 7, 2023, Israel’s economy has been under severe strain. Yet residential real estate has shown notable resilience: urban renewal and densification projects saw investment surge by 28%, fueling construction activity despite ongoing economic volatility ainvest.com.

Price Movements and Demand
Following a modest dip in late 2023, home prices rebounded strongly. In Q1 2024, the average owner-occupied dwelling price rose 12.75% year-on-year to ILS 2,233,400 (US $600,918), a 9.86% increase when adjusted for inflation globalpropertyguide.com. Official statistics further reveal a 7.5% year-on-year increase between February 2023 and February 2024, underlining the market’s robustness despite security concerns timesofisrael.com.

Supporting Factors and Challenges

• Domestic and Diaspora Demand: geopolitical uncertainty has driven both local families and overseas Jews to secure property in Israel, sustaining high demand jpost.com.

• Monetary Policy: the Bank of Israel held its benchmark rate at 4.5% in 2024 to tame inflation, helping stabilize borrowing costs amid the conflict reuters.com.

• Constraints: labor shortages in construction, rising material costs, and elevated risk perceptions slow some projects, but do not reverse the overall upward trajectory.