Posted on 07/21/25
With Israel’s decisive victory over Iran – even as fighting continues in the south and north – many are asking: what will happen to the real estate market when the fighting ends? Will prices drop? Will the market stagnate? Or will we see the familiar pattern of resilience and growth?
Looking at Israel’s history, a clear trend emerges. While previous wars created short-term uncertainty, Israel’s real estate market has consistently rebounded – often with surprising strength. During and in the immediate aftermath of previous conflicts, domestic and foreign buyers were understandably hesitant to purchase and developers sometimes delayed projects. But these slowdowns were temporary.
After the Yom Kippur War in 1973, Israel’s economy was shaken and inflation surged, but real estate values ultimately climbed. A similar pattern played out during and after the two Intifadas. Although terrorism and instability rocked the country, housing prices held steady and resumed their upward trajectory once tensions eased. The Second Lebanon War in 2006 caused brief jitters in the northern market, yet within a year, prices were rising again. Even during repeated conflicts with Hamas in Gaza over the past two decades, market hesitation has been short-lived. Across much of the country, demand has outpaced supply — and prices have risen.
Soon after the war began on October 7th, overseas buyers responded with urgency. After a brief initial lull, sales in key markets picked up quickly, and prices began to rise. Some are planning long-term for Aliyah. Others are motivated by a deep sense of connection and solidarity. And for others, the motivation is practical: a growing number of Jews around the world want an anchor in Israel – a place of their own, just in case. With antisemitism on the rise globally, the idea of having “a piece of the rock” in Israel has shifted from dream to necessity for many families. It’s not necessarily about moving tomorrow – it’s about knowing there’s a home waiting, if and when it’s needed.
Given strong sales over the past 18 months, and clear historical patterns of post-war growth, prices are expected to keep rising.
There are several factors that explain why prices tend to rise after wars. Israel’s population continues to grow rapidly, but new housing hasn’t kept pace, creating ongoing pressure on supply. Land is limited — especially in central areas — which makes development more difficult and drives competition. And perhaps most importantly, despite the challenges of war, Israel’s economy is widely viewed as resilient and fundamentally strong, giving both local and international buyers confidence in the market’s long-term prospects.
Emerging from its war with Iran having restored deterrence and regional standing, Israel’s global business ties are likely to deepen. Countries looking to strengthen security partnerships and tech collaboration may view Israel as a more attractive partner than ever before. A stronger economy supports a stronger real estate market — particularly in big cities where international business often drives demand.
The October 7th war is not yet over, but prices in major cities have been rising. If history is any guide, coupled with all the reasons listed above, this conflict’s end will mark the beginning of Israel real estate’s next wave of growth.
Perhaps most importantly, moments of national trauma often ignite renewed commitment. For many, buying a home in Israel is not just a financial decision — it becomes a deeply personal act of connection with Am Yisrael.
Gedaliah Borvick is the founder of My Israel Home (www.myisraelhome.com), a real estate agency focused on helping people from abroad buy and sell homes in Israel. To sign up for his monthly market updates, contact him at gborvick@gmail.com.