Israel’s real estate market has been hit hard by the war against Hamas terrorists in the Gaza Strip, but Israelis are still bracing for a surge in new residents after the fighting ends.
Besides people’s unwillingness to buy during times of uncertainty, the main reason for the current economic downturn is the lack of labor.
In recent decades, Israel’s construction industry has become increasingly dependent on Arab workers. These workers are from Gaza or the West Bank. Some live in East Jerusalem.
Citing the security situation due to the ongoing war, the Israel Defense Forces (IDF) prevents people with these permits from entering Israel. As a result, the construction site remained dormant for most of October. The conflict began on October 7 with Hamas massacres across southern Israel.
Some of the construction workers are Chinese workers, many of whom have returned to China. It is unclear when they will return.
Ayelet Shaked, who served as Israel’s interior minister from 2021 to 2022 and then began his career in real estate as chairman of one of the country’s largest companies, told Hebrew media that despite the war, he remains committed to real estate. He said interest is growing again.
“We expect the market to recover soon after the war,” Shaked said. “The market is tough, there is a demand for apartments, and this demand will continue and increase. I predict that there will be a large influx of Jews from abroad after the war. It is clearly affected by the fact that human workers do not come to work in Israel.”
Anti-Semitism has skyrocketed worldwide since the Hamas onslaught on October 7, with Jewish communities experiencing record numbers of anti-Semitic incidents, particularly in the United States and Europe.
In this environment, many Israelis involved in the real estate industry predict that once the war in Hamas-controlled Gaza ends, there will be a surge in immigration and, in turn, a revitalization of the real estate market.
“Due to rising anti-Semitism in Jewish communities around the world, one million new immigrants are expected in the coming years,” Maj. Gen. Doron Almog, head of the Jewish Agency for Israel, told Israeli media. N12
Immigration groups have already noted an increase in citizenship applications to Israel.
Individuals with at least one Jewish grandparent are eligible to immigrate to Israel under immigration law. The “grandfather clause,” as it is known in Hebrew, is due to the fact that the Nazis classified anyone who had at least one Jewish grandparent as a Jew.
The Israeli government often plans to absorb large numbers of Jews. Assuming there are available workers and construction returns to a normal pace, there are tens of thousands of apartment units currently in construction or scheduled to break ground in the near future.