Israel’s Changing Real Estate Landscape and the Allure of Overseas Investments – Hila Zion Appears on “Building Far Away”

The radio program "Building Far Away," hosted by Merav Miller and Aviv Cohen, featured a fascinating interview in its latest episode with Hila Zion, a veteran real estate reporter with a long track record and a unique perspective on the real estate landscape. What did Zion say about market trends, the challenges unique to Israel, and the growing trend of purchasing property abroad?

In the latest episode of the podcast “Building Far,” hosts Aviv Cohen and Merav Miller welcomed Hila Zion, a veteran journalist specializing in real estate and economics who serves as an editor and presenter at Ynet and Yedioth Ahronoth.

Following a discussion on investing in Greece between the two hosts, Tzion offered a professional perspective in the interview on the Israeli real estate market, the dynamics of real estate journalism, and the growing trend of Israelis investing in overseas properties. Her analysis, rooted in years of covering the field—including since the 2012 social protest that began with cottage cheese prices and shifted to housing—sheds light on the complexities, topics popular among readers, and current significant trends.

A Journey into the World of Real Estate Journalism

Zion’s journey into real estate journalism was not planned in advance. Although she had aspired to be a journalist since the age of 15 and loved the written word, the real estate sector, as she describes it, “chose me.” “In 2012, Ynet decided to launch a new real estate channel, and even though I hadn’t specialized in the field before, I was called upon to establish and lead it,” she explains. Since then, she has been covering the sector, which she describes as “a fascinating field that affects us all, because it’s connected to our homes.” The real estate beat in the Israeli media, in her opinion, is “amazing and staffed by highly professional reporters. It’s a demanding field with no dull moments, and the work is around the clock.”

The Crucial Distinction: Editorial Content vs. Marketing Content

A significant aspect of her work, Zion notes, is the essential distinction between editorial content and marketing content. While she acknowledges that the changing media landscape has necessitated more commercial revenue, especially since online content was initially offered for free (a model that Ynet pioneered), she emphasizes that there is a strict separation in her journalistic work. “I am a proper reporter and editor,” she says. In her newsroom, “we are very strict about editorial writing, investigative reporting, and expressing ideas.” This distinction is critical, as marketing content can be perceived as too promotional, whereas editorial content “asks the tough questions and also brings up the less pleasant things. Not everything is rosy.”

What really interests readers? Prices, trends, and urban renewal

Regarding readers’ interests, Zion notes that certain topics consistently attract a great deal of attention. “Articles about luxury properties, such as a penthouse that sold for 24 million shekels, catch the eye, even if such properties are generally inaccessible to the general public,” she says. However, readers are also deeply interested in prices and trends. Data from the Central Bureau of Statistics on housing prices and rental costs are particularly popular. People want to understand what current trends and statistics mean for their housing situation. They want to know if the value of their property has gone up, and they’re very curious about urban renewal projects like demolition and reconstruction and whether they’re likely to happen in their neighborhood.” People’s natural connection to their homes makes real estate topics inherently fascinating. “It really touches all of us—it’s our home,” she says.

Current Trends in the Israeli Real Estate Market: A Slowdown Amid Challenges

In a discussion of current trends in the Israeli market, Zion points to a noticeable shift. “According to recent data from the Central Bureau of Statistics,” she says, “while apartment prices are still rising, the rate of increase is slowing down. For example, the monthly increase was 0.1% in one period, compared to nearly 1% previously. The annual increase in prices has also slowed slightly, from about 7.5% to nearly 6.5%." Zion points out that the main factor pulling the overall index downward is the weakness in the resale housing market.

Several factors are contributing to this decline in the resale market. Crucially, "Operation Iron Swords has highlighted the need for a bomb shelter, and older apartments typically lack such protected rooms. As a result, demand for new apartments with bomb shelters has surged, leading to a rise in their prices. In contrast, demand for older apartments without this feature has fallen.” Zion cites reports from real estate agents in northern Tel Aviv indicating a price drop of nearly 15% in second-hand apartments there—a significant decline despite the high starting prices in the area.

Beyond the impact of the war, other factors affecting the market include the high-interest-rate environment and rising mortgage costs. “Data from the Bank of Israel recently showed an increase in the number of mortgages with delinquent monthly payments,” she says. “Since interest rates remain high and are unlikely to drop anytime soon, combined with the high cost of living, people are struggling to meet their monthly mortgage payments. This is a serious problem. The combination of these factors has led to a standstill in the market.” Zion even tried putting her apartment up for sale to get a firsthand look at the market, noting that there wasn’t much interest, likely because it doesn’t have a security room.

On the other hand, developers are actively trying to attract buyers through various promotions. These generally fall into two categories: developer loans (bridge or balloon loans, in which a large sum is paid at the end), and payment models such as 20/80 or 10/90. The latter models involve paying a small percentage of the down payment (e.g., 20%) upon signing the contract and the balance (80%) upon receiving the apartment. The Bank of Israel recently imposed restrictions on these promotions, partly due to concerns that buyers using these models may be unable to complete the transaction, posing a risk to the buyer, the developer, and the bank financing the project. In addition, the Bank of Israel raised concerns, backed by research, that these promotions, which were intended to offer discounts, actually contributed to rising prices. The State Comptroller is also examining the implications of these promotions, Zion explains in an interview.

The Growing Appeal of Buying Property Abroad: Israelis Are Looking for a Plan B 

One particularly striking trend that Zion has observed, especially over the past year, is the significant increase in the number of Israelis investing their money abroad. This trend has intensified to an “unreasonable extent, giving the impression that everyone now owns an apartment abroad,” she says.

Zion wrote a series of articles on the subject, covering real estate markets in Greece, Cyprus, Portugal, and Georgia. She is currently working on another article about yet another European country. "I focus mainly on Europe because of its proximity, but I recognize that Israelis are also buying in more distant places like Thailand (sometimes for residential purposes, not just for investment) and the United States (a longer-standing trend)."

Several factors are driving this increase in overseas purchases, she says. “High housing prices in Israel and high interest rates, which make mortgages expensive, are significant drivers. Israelis are looking for opportunities and alternatives.” This search for a Plan B is driven not only by investment opportunities but also by those looking for a place to live elsewhere. The trend was observed to intensify during the judicial reform debates and has grown significantly in the wake of the war. “Buyers have become more sophisticated in their search,” Ziyon shares. 

Essential Tips for Overseas Buyers: Thorough and Professional Inspections

Furthermore, “It’s essential to hire professional advisors, such as lawyers and accountants who specialize in international tax issues. I’ve become something of an expert on this since I started writing about the overseas real estate market,” she says, noting that every country has its own tax laws, which are extremely important. “Tax implications, such as purchase tax, rental income tax, or inheritance tax, can vary greatly and significantly impact the investment.”

Beyond issues related to the developer and taxes, fundamental considerations include tenant demand and property management. “If you’re buying for investment, you need to assess whether there will be tenants and whether the chosen management company is reliable. There have been cases where tenants stopped paying despite due diligence.” It is also important to understand local laws regarding tenants, as it may be difficult in some places to evict a tenant who does not pay. Finally, “you must examine the tax relationship between Israel and the destination country and check whether tax treaties exist,” says Zion.

On a personal note – the important recognition of adult IDF orphans

Toward the end of the interview, Zion mentions a personal aspect of her life: she is an IDF orphan. Her father, Shlomo Bekmeister, was killed in the Battle of Sultan Ya’qub in 1982. She has been involved in the fight for the rights of adult IDF orphans. “For many years, IDF orphans over the age of 21 were not recognized by state institutions,” she explains. While recent attempts have been made to recognize adult orphans up to age 40, Zion, who has passed that threshold, and many others like her over the age of 40 or 50, still feel “invisible.” Although she is not leading the fight, commemorating her father is important to her, which led her to write an opinion piece on the subject. She feels that “recognition up to age 40 is simply not enough.” Her personal story highlights the growing number of IDF orphans, which has unfortunately increased in recent years.