{"id":532223,"date":"2026-07-09T02:10:11","date_gmt":"2026-07-09T02:10:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/532223\/"},"modified":"2026-07-09T02:10:11","modified_gmt":"2026-07-09T02:10:11","slug":"stronger-shekel-reshapes-housing-market-as-foreign-buyers-lose-purchasing-power","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/532223\/","title":{"rendered":"Stronger shekel reshapes housing market as foreign buyers lose purchasing power"},"content":{"rendered":"

For years, foreign buyers helped fuel Israel\u2019s booming real estate market, particularly in Jerusalem and Tel Aviv, often paying in US dollars while benefiting from a relatively weak shekel.<\/p>\n

Now, with the Israeli currency having strengthened sharply against the dollar in recent months, the equation has flipped, real estate agents tell The Times of Israel.<\/p>\n

Foreign conversion rates for the Israeli currency, which currently trades at around NIS 3 to the dollar, are forcing buyers to consider new financing options, look to buying \u201con paper\u201d in new projects, or in some cases, downgrade their expectations and buy less expensive homes, agents say.<\/p>\n

\u201cThe irony is that a lot of the reason market prices got so high is because of foreigners who came because of the weak shekel in past years,\u201d said Yitzchak Kowalsky, CEO of YKK Jerusalem Real Estate. \u201cNow, we\u2019re seeing for the first time in years that Israeli clients can actually compete with foreign buyers.\u201d<\/p>\n

The Israeli currency is about 10 percent stronger than it was a year ago, and has fluctuated by more than 20% over the past 16 months, trading data shows.<\/p>\n

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A year ago this week, the shekel traded at NIS 3.37 to the dollar, compared to NIS 3.00 today. It reached as strong as NIS 2.80 against the dollar on May 29, after trading at NIS 3.74 14 months earlier on April 5, 2025.<\/p>\n

The strength of the shekel means that while interest from foreign buyers is still high, their dollars, pounds and euros don\u2019t go as far as they used to, with the cost of homes rising by hundreds of thousands in some cases when exchanging currencies.<\/p>\n

\t\"\"<\/a>
\n\t\t(L-R) Noah Sander, real estate advisor and founder of Zionistinvestor.com; Yitzchak Kowalsky, CEO of YKK Jerusalem Real Estate; and Norman Shapiro, senior mortgage broker at First Israel Mortgages (Courtesy)<\/p>\n

Kowalsky recalled one client who had transferred dollars to Israel for his home purchase and recently forced to put up an extra NIS 200,000 ($66,572) to make up for the difference.<\/p>\n

\u201cIt\u2019s a good thing he had the money,\u201d Kowalsky said. \u201cWhat about all the people who can\u2019t do that?\u201d<\/p>\n

The recent strength of the shekel has been rewriting the rules of Israel\u2019s housing market, adding a new layer of uncertainty to a sector that has been looking to recover from more than two and a half years of security-related challenges, real estate agents say.<\/p>\n

\u201cThe conversation has changed, but the demand hasn\u2019t disappeared,\u201d said Noah Sander, a real estate adviser and founder of Zionistinvestor.com<\/a>. \u201cI haven\u2019t had a single client tell me they\u2019re no longer buying because of the exchange rate. They\u2019re just looking at different products.\u201d<\/p>\n

The shekel\u2019s strength is the latest in a string of recent challenges to Israel\u2019s real estate market. Once red-hot, the market has slowed in recent years as interest rates rose from near-zero levels, supply reached record levels, and Israel\u2019s wars in Gaza, Lebanon, and Iran hampered market visibility.<\/p>\n

Interest from foreign buyers remains high, however, as Jews from abroad increasingly seek a foothold in Israel to escape from rising antisemitism, agents said.<\/p>\n

\u201cThree years ago, everything was selling,\u201d Sander said. \u201cThen interest rates rose, then the war came. It didn\u2019t stop people from buying, but it made their decision-making processes more complicated.\u201d<\/p>\n

\t\"\"<\/a>
\n\t\tConstruction and rebuilding of structures damaged by rockets fired from Lebanon, in the northern Israeli town of Metula, June 22, 2026 (Chen Leopold\/FLASH90)<\/p>\n

Boosting new projects<\/p>\n

The strong shekel has affected buying patterns in surprising ways, Sander said. One is the increased demand for new projects on paper, at the expense of secondhand apartments currently available.<\/p>\n

Many developers offer attractive financing packages for new homes in which buyers can pay only 10% or 15% of the price of an apartment up front, with the balance due several years later when the keys are delivered. This allows buyers to delay converting dollars into shekels in the hope that exchange rates become more favorable.<\/p>\n

\u201cNobody is worried that the dollar will stay where it is forever,\u201d Sander said. \u201cThe market is generally confident that the shekel will recover [from being too strong], and people think they can buy themselves a few more years by spreading out payments.\u201d<\/p>\n

That has made new construction much more desirable than older apartments, for many, Sander said. In Tel Aviv and the surrounding cities, prices for secondhand properties have fallen roughly 20% in recent years, he said.<\/p>\n

\u201cI think this price gap between new and secondhand properties will continue to grow,\u201d Sander said. \u201cPeople don\u2019t see value anymore in buying an apartment in an old building with no elevator and no shelter from missiles. Old apartments are losing their value quickly.\u201d<\/p>\n

\t\"\"<\/a>
\n\t\tView of the Jerusalem skyline at sunset, February 12, 2026 (Chaim Goldberg\/Flash90)<\/p>\n

Urban renewal projects can help a building retain its value, but as market demand weakens, buyers have learned to see little value in plans for TAMA 38 renovations in a building until construction actually begins, Sander said.<\/p>\n

Developers for the TAMA 38 projects generally need to show the banks that they have sold a certain number of apartments at the price they are asking to get the loans they need, Sander explained. If they can\u2019t get the loan, the project can fall through, something that has become increasingly common as demand falters.<\/p>\n

\u201cThat means that even if you get a building permit, it doesn\u2019t really mean anything anymore until work actually starts,\u201d he said.<\/p>\n

Adapting to expectations<\/p>\n

Meanwhile, speculative buyers have a few options to try to time the market and wait until the shekel weakens.<\/p>\n

Banks have become increasingly flexible in structuring loans that allow buyers to temporarily pledge dollar deposits as collateral while borrowing in shekels, said Norman Shapiro, senior mortgage broker at First Israel Mortgages.<\/p>\n

That means a buyer transferring, say, $500,000 from abroad could decide to keep some of their dollars intact while borrowing the equivalent amount in shekels. Assuming the shekel weakens in the coming months, that could lead to significant savings even after paying interest on the loan, Shapiro said.<\/p>\n

\u201cThis allows people to avoid converting their dollars to shekels now, in the expectation that the interest of the exchange rate will improve in their favor over the next six months to a year,\u201d he explained. \u201cI don\u2019t have any inside information, but there seems to be a general consensus among buyers that the shekel is going to weaken against the dollar.\u201d (Buyers are advised not to take this as financial advice, and to make their own decisions with the help of a qualified adviser.)<\/p>\n

\t\"\"<\/a>
\n\t\tAn illustrative view of a Bank Hapoalim branch in central Jerusalem on July 27, 2022. (Yonatan Sindel\/Flash90)<\/p>\n

Many buyers, meanwhile, are concluding that they have to scale down their expectations to adapt to the new conditions.<\/p>\n

Some are finding that a budget that once covered a spacious three-bedroom apartment in Tel Aviv or Jerusalem may now translate into a smaller unit, a less central location, or a project further from completion, agents said.<\/p>\n

\u201cPeople are coming in with the same budget mindset they had two or three years ago,\u201d said Kowalsky. \u201cBut when they see what that actually buys today, they realize they have to choose between stretching themselves financially or compromising on size, location, or finish.\u201d<\/p>\n

That means some buyers are shifting from established neighborhoods to emerging areas where prices remain lower, or choosing compact new-build apartments instead of larger secondhand homes. It may be a painful compromise, but after years of disappointment waiting for prices to fall, many buyers are choosing to jump in now rather than continue to wait.<\/p>\n

\u201cWe\u2019re seeing more people say, \u2018Let\u2019s just get in now,\u2019\u201d Sander said. \u201cThey\u2019d rather own something here, even if it\u2019s not their ideal home, than wait and risk being priced out further.\u201d<\/p>\n

\t\"\"<\/a>
\n\t\tThe beach promenade in Tel Aviv, on a hot day. November 06, 2025 (Miriam Alster\/FLASH90)<\/p>\n

Still others seek to own something in Israel now due to growing antisemitism in Jewish communities around the world that is forcing people to ask uncomfortable questions about their futures.<\/p>\n

\u201cPeople are having conversations about what their \u2018plan B\u2019 is if they have to leave the Diaspora,\u201d Shapiro said. \u201cThat fear is driving a lot of interest in the market here, even if it isn\u2019t translating yet into huge buying frenzies.\u201d<\/p>\n

For now, the market remains slow, with Israelis cautious after months of reserve duty, economic uncertainty and elevated borrowing costs.<\/p>\n

\u201cThere are certainly people waiting for the war to finally be over,\u201d Sander said. \u201cBut the people who are serious are still doing deals. They\u2019re just doing them differently.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"For years, foreign buyers helped fuel Israel\u2019s booming real estate market, particularly in Jerusalem and Tel Aviv, often…\n","protected":false},"author":2,"featured_media":532224,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[42,242929,43,197029,242928,194474,242930,40,38,41,39],"class_list":["post-532223","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-headlines","tag-jerusalem-real-estate","tag-news","tag-real-estate-in-israel","tag-shekel-strength","tag-shekel-dollar-exchange-rate","tag-tel-aviv-real-estate","tag-top-news","tag-top-stories","tag-topnews","tag-topstories"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/532223","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=532223"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/532223\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/532224"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=532223"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=532223"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=532223"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}