The new year is here and it seems that we are moving towards interesting changes on the real estate front. While many believed that the zero interest rate that has accompanied us for several years would increase, we are also starting 2020 without any change in the near term. This means that real assets will continue to maintain their high position and investment in real estate will continue to be attractive and may even attract new investors to the industry. But what will be the more attractive sectors for investment in the coming year? Please note:
The light rail is on the tracks
One of the areas worth paying special attention to in the coming years is the neighborhoods near the light rail route. According to forecasts and existing experience around the world, it seems that apartments near train stations can increase their value by 15%. The cities worth examining are those where the red route passes, the work on which is scheduled to be completed by the end of 2021, including Petah Tikva, Bnei Brak, Ramat Gan, Jaffa and Bat Yam.
But if the railway work progresses as expected, apartment prices are also expected to rise in areas adjacent to the Green and Purple Line routes, and the list of cities will include Givatayim, Kiryat Ono, Givat Shmuel, Or Yehuda and Yehud-Monson, as well as Rishon LeZion, Holon and Herzliya. There is something to look forward to.
Interesting opportunities in the periphery
Alongside the opportunities that arise in the central cities, it is important to remember that the yields from renting an apartment in the peripheral areas are significantly higher than apartments in the center of the country, and it is not without reason that the peripheral cities attract many investors to them. However, in recent years, some of the cities that previously exhibited rapid price increases have seen a more moderate price increase. For example, if in Be'er Sheva, apartment prices according to Madelen increased on average from 2006 to 2012 by 126%, from 2012 to the present, prices have increased by only 15%. The periphery will continue to attract investors, but it is important to find where the potential for a more significant increase in value lies.
Is investing abroad more profitable?
Another option for investing in real estate in 2020 is in properties overseas. While prices in Israel are only increasing, in various places around the world you can find properties for only a few hundred thousand shekels and enjoy returns of between 7% and 10%.
However, investing in property abroad requires full familiarity with the tax laws of each country and in many cases requires double tax payments to both the State of Israel and the country in which the property is located, and these are significant amounts. Failure to pay taxes according to the law may result in heavy fines and penalties, and thus a solid investment may quickly become a high-risk investment.
Shopping malls OUT Logistics centers IN
And what about commercial real estate ? The changing consumption habits of the last decade have also greatly affected the real estate market, and worldwide, large shopping malls have been abandoned in favor of online commerce.
In place of shopping malls, there is a growing demand for logistics centers used to store goods purchased online and prepare them for shipment. US investors who have invested in logistics centers are already enjoying a 16% return, and Amazon's entry into Israel symbolizes, among other things, the entry of the new trend into our country.
Shared living and concept
Not only are consumption habits changing, but so are living habits, and new trends that are gaining momentum in the world and in Israel will occupy a more central share in the coming year. Anyone who follows the new trends in the world of real estate has probably already noticed the development of the co-living model, a form of living based on collaboration and community and allowing the construction of private spaces alongside shared spaces in one living space.
The trend that has begun to gain momentum in Europe and the US will at some point reach Israel, and it seems that this is an interesting alternative for investment. Another trend that is also spreading in Israel is concept housing that is tailored to the lifestyles of potential residents. For example, a special residential project for students in the city was recently inaugurated in Be'er Sheva, with large, well-designed apartments alongside shared public spaces intended for various social activities, as well as the Umami residential complex , which is currently being built in the Neot Ariel neighborhood in Kiryat Ono and is designed to create a unique living experience for those who love cooking and hosting, and includes fully equipped kitchens, preparation for a spice garden on the balcony, wine cellars in the common spaces, and more.
The 2020 real estate market is fertile ground for both veteran and new investors, all that remains is to find the right opportunity for you and enjoy the fruits.
successfully!
