09 March 2006

Foreign property investment up in Israel

In the first months of 2006, the monthly average was counted at NIS 115 million.Foreign investments in Israeli real estate are on the rise, according to data published Tuesday by the Ministry of Construction and Housing.
In 2005 there was a 53 percent increase in foreign investment over 2004, and in January 2006, a 12 percent increase was measured over the monthly average in 2005.

Israeli investments abroad have been on the decline since 2003, data shows. The drop is apparently due to finance reforms which raised taxes on foreign assets.
Since 2001, the ministry registers consistent growth in foreign investments in Israeli real estate. In 2001, the average monthly foreign investment stood at NIS 14 million, in 2002 it rose to NIS 16 million, in 2003 NIS 39 million, in 2004 NIS 67 million, and in 2005 it totaled NIS 102 million.

According to Ministry of Construction and Housing Director-General Shmuel Abuav, the consistent fall in interest rates and the improved

security situation in Israel attracted foreigners to invest in the Israeli market, as have the low property prices.

“Real estate prices looked especially low this year for investors from the Euro bloc, who also benefited from the increased value of European currency. The recovering real estate market in Israel will lead to an improvement in shares in the construction sector, which were very low for years and have just recently started to recuperate,” Abuav said.

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