Investing in Israel offers at least two key advantages: it makes solid financial sense, and it embodies pure Zionism. But even if we set aside the emotional and ideological aspects, Israel’s economic fundamentals and market structure ensure that investing here is, first and foremost, a smart financial decision.
A look at Israel’s real estate market paints an outstanding picture. Aside from a brief slowdown in the early months of the war (late 2023), the housing market continued to grow. Demand remained strong, Israelis took out tens of billions of shekels in loans to purchase properties, and prices saw an almost double-digit increase. Additionally, given the shekel’s exchange rate, buying property in Israel provides smart risk diversification and a solid long-term investment. Since 2008, the Israeli real estate market has not experienced a downturn—prices have consistently risen, driven by increasing demand and a supply shortage that fails to meet local needs. Israel’s interest rate environment also supports this trend, with mortgage rates significantly lower than those in the U.S.
Will this real estate boom continue? All objective indicators suggest that it may. Israel has one of the highest birth rates in the developed world, immigration (Aliya) is net positive and expected to grow, the demand-supply gap remains wide, unemployment is low, and the economy is projected to grow by 4% over the next two years—four times the growth rate expected in other developed nations.
For those skeptical about real estate, Israel’s currency, the shekel, presents another promising investment. The shekel has been one of the world’s strongest currencies in recent years, even during wartime, it maintained its strength against the U.S. dollar despite the uncertainty following the events of October 7.
When it comes to Israeli high-tech, little needs to be said. Israel boasts the world’s third-most significant tech ecosystem. The strength of this sector is evident not just from capital-raising trends over the past decade but also in the past two years alone. The numbers speak for themselves. The recent sale of WIZ to Google, just weeks ago,
highlights the immense global interest in Israeli innovation. And that’s without even mentioning Israel’s defense industries, which are overwhelmed with orders from around the world, totaling tens of billions of dollars.
For those interested in stocks and bonds, the Tel Aviv Stock Exchange (TASE) deserves close attention. A comparison between TASE and the S&P 500 shows that the Israeli stock market outperformed its New York counterpart last year. While it operates in a volatile environment, even during extreme circumstances, it has continued to grow and
generate impressive returns for investors.
Beyond all these positive indicators, a new realization has emerged in Israel over the past year and a half: Israel cannot afford to depend on anyone else. As a result, significant investments are expected to flow into local industries in the coming years to ensure the country’s self-sufficiency in all areas. Israelis aren’t looking for a way
out—they’re looking for ways to strengthen their foothold in their homeland. Security and economic growth go hand in hand, forming the foundation for Israel’s continued economic strength.
Written in collaboration with Mizrahi Tefahot