Why You Should Jump Into the Market NOW!

Why You Should Jump

Into the Market NOW!

* These are the thoughts of CapitIL's Sales Director Ben Levene.

Prices are high and interest rates are rising - why should you buy a property now?

This is a question I get often from people who want to buy Real Estate in Jerusalem. They say, “well maybe we should wait for the prices to drop,” or “I just want to see what happens with the market.”

Now, in response to this I say, and disclaimer, this is entirely my opinion on the subject, that in my 11 years of experience working here in Jerusalem, I have not seen the Real Estate market take a significant hit.

Whatever is happening in the world or economy, the market has not dropped enough to say, “wow the market has dropped 15 percent, this is the time, we should buy now.” 

If you wait, you risk that the prices will increase. You will not want to be saying a few years down the line, “oh, if only we had bought five years ago.”

This happens quite frequently when I meet with clients, and if they are saying that now, I believe they will be saying it again in 5 years. 

I understand it’s hard to spend this kind of money, but you should only wait for something if you truly believe the market will come down.

The market has been going up on average about 10 percent a year and that is only the average- it does not include top areas such as German Colony, Talbiya, Rehavia, and even Tel Aviv.

Areas like these have increased even quicker than most places. During corona, in my opinion, the arbitrary market has gone up 15-20%.

Now again, will this carry on, or will it slow down?

Reason To Buy Now #1- Supply Issues

The biggest issue in the Jerusalem market currently is the supply. We have such a huge demand for apartments, and there is such little supply.

The longer this carries on, the less chance we have of prices going down. The problem is, we would need to increase the supply by a huge amount - we aren’t talking about 20 units here, we are talking about hundreds and hundreds of units in the top areas to slow the prices. Honestly, I don’t see that happening. 

Reason To Buy Now #2- Strong Dollar Value

The dollar has swung 8 plus percent in the last few months; the dollar is approaching 3.50, another reasons why buyers are in the market.

If you believe this is a temporary situation, then this is a very strong reason to jump into the market.

Don’t rush in and buy on a whim - do your research and due diligence obviously. But if you have the option to buy, your dollars will buy you more.

However, if you believe the dollar will go over 3.50 towards 4 over the next year, then you can be more patient until that potentially happens. 

Can the Government Fix This?

One thing the government can do is make some tax changes, however all the current tax changes they have made have only generated revenue - they have had little effect on the market prices.

In order to have a real impact, the taxes would have to increase by a crazy amount, which we hope they will not do, because although that would reduce the prices, it would also rule you out of buying.

They have already raised the purchase tax to 8% staggered up, and I don’t see them doubling that in the near future. That is what I believe would need to do to truly have an impact on the market. 

In conclusion, I do not see a likely way the market will change and decrease in price significantly anytime soon.

My recommendation for anyone who wants to own an apartment here in Jerusalem is to search for good apartments, and if the market and economy are in your favor that is an extra reason you should move forward.

The dollar is strong, interest has not yet shot up, and there is still time to lock in rates- in my opinion now is a great time to buy in Jerusalem.

Of course, you might take an angle to wait - this is totally the buyers perogative - I just do not see the dips that some of my clients believe are coming.

See available Jerusalem real estate here and new development projects here.