May all your surprises be happy ones
IF YOU are familiar with the British housing market and its buying conventions, investing in Israeli property can bring surprises. But real estate consultant Sandi Ryker advises people not to be deterred. “There’s a lot of bureaucracy that there isn’t in other countries,” says Ms Ryker, at My Israel Property. There are all sorts of registration documents and procedures that need to be completed. But, unsurprisingly, Israel also has more lawyers per capita than pretty much anywhere else and the best property lawyers know well how to take care of all the necessary paperwork.
If you do not know Hebrew, your lawyer can also serve as your language guide through the legal side of the process.
It is easy to find a lawyer who will speak to you and correspond in English and, admirable as it is to master a new language, your property purchase may not be the best opportunity for doing so.
Ms Ryker points out that rental yields tend to be relatively low in Israel compared to many other countries, yet on the other hand, capital gains over the past decade have proved high, and for diaspora Jews there is an emo- tional pull to investing in Israel. “Over the past decade you have gotten excellent capital gains but the correlation between the property price and rental is low — about three per cent a year on average — in residential,” she says.
On the emotional value of investing in Israel she says: “In every prop- erty investment here there’s a huge emotional factor — you are buying something for yourself but you are also helping the Israeli economy and getting a foothold in Israel.”
Other key differences that should be taken into account when looking to invest in Israel include estate agent costs, building rights and the main variable for measuring the size of a property.
British sellers expect to pay agent fees while British buyers do not. Be prepared — in Israel, both sides are expected to pay the agent a commission, which is typically 1.5 to 2 per cent of the cost of the property, plus VAT. This is the norm across the country and you are unlikely to get anywhere telling the agent that “back home buyers do not pay” (though this is Israel, so you could always give it a try as an opening gambit to a haggle).
The level of the fee is fixed just before you set foot in any property that you want to view, when you sign a form saying that if you buy this home, the agent showing it to you deserves commission. It is at that point that, if you want to haggle the agent down from the standard two per cent commission, you may be able to.
Building rights are very different in Israel from the way they work in Britain, so do not buy a property presuming that you can build an extension, or even a garden shed. If your decision about whether to purchase a particular home hinges on the belief that it will be extendable, be sure to get your lawyer to check this carefully.
Finally, remember to think in metres if you care about resale or rental value. In the UK, people rarely talk about the square metreage of their home, but in Israel it is the ultimate variable that people discuss, even moreso than the number of rooms. For property consultancy for Englishspeakers in Israel, also see page A7