Waiting for the Dollar to Rise Before Buying in Israel? Think Again.

By Yair Givati, Esq.

For many families in the U.S., buying property in Israel is about more than real estate.

It may be a future home, a place for children or grandchildren, a base for frequent visits, part of a longer-term plan to make aliyah, or simply an investment.

But for anyone considering a purchase today, there is one question being asked more than ever: Should we wait for the dollar to strengthen?

It’s an understandable question. A weaker dollar against the shekel means that American buyers currently have less purchasing power in Israel than they did previously. For a significant purchase—and let’s face it, most property purchases in Israel are significant—the exchange rate can have a hefty impact on the total cost.

But waiting for the dollar to rise is not necessarily the low-risk option many buyers assume it to be.

The Risk of Waiting

There is no guarantee that the dollar will strengthen significantly, or that it will strengthen at all.

At the same time, if you wait for a more favorable exchange rate, the property you are considering today may become more expensive.

This is the challenge with trying to time two markets at once.

Imagine waiting because you hope the dollar will improve by 10%. If, during that same period, Israeli property prices rise by 10% or more, you may find yourself in the same position, or potentially paying even more.

Of course, no one can predict where exchange rates or property prices will go. But buyers should consider the full picture rather than making a decision based solely on today’s exchange rate.

The question may not simply be, “Will the dollar get stronger?”

It may also be, “What will this property cost me if I wait?”

Buying in a New Development Offers More Flexibility

One response to the current exchange rate is a growing interest in new developments. One of the main advantages is securing a purchase price today while spreading payments over the construction period, rather than funding the entire purchase upfront.

Depending on the project and the developer’s financing structure, buyers may be able to pay a relatively small percentage upon signing, with the balance due closer to completion.

This can be particularly attractive for American buyers dealing with the current exchange rate.

Rather than converting the entire purchase price into shekels immediately, buyers may have several years to plan their financing and currency transfers.

For those who expect to sell a property in the U.S. to fund their Israeli purchase, this additional time can also provide valuable flexibility.

A Growing Shift Towards Israeli Financing

Another trend and response to the exchange rate is a growing interest in financing property purchases in Israel. With mortgage rates becoming increasingly attractive—and the Bank of Israel recently cutting interest rates again at the beginning of September—buyers are looking more closely at financing as part of their overall purchase strategy.

Some clients who had originally planned to purchase a property outright are now considering taking out a mortgage to finance as much of the purchase as possible. Since the mortgage is taken out in NIS and repayments are spread over many years, this can reduce a buyer’s immediate exposure to the current exchange rate. However, it is important to try to negotiate an early repayment or exit clause with the bank, so that if exchange rates become more favorable in the future, the mortgage can potentially be repaid without significant penalties.

We are also seeing a shift among clients who had always planned to use financing but intended to delay taking out their mortgage for as long as possible. Instead, some are now looking to access financing earlier, allowing upcoming payments to be made from an NIS-denominated mortgage rather than from their own foreign-currency funds, which currently have less purchasing power due to the exchange rate.

That said, taking out a mortgage before contributing all of the funds from your own sources may require special approval from the bank, so it is important to plan the financing structure carefully.

This Is Where Negotiation Matters

Not all developers are offering the same terms, and buyers should not assume that the terms initially presented are non-negotiable.

In today’s market, developers may be more open to discussions around:

→ Payment schedules

→ The amount required upfront

→ Indexation and exposure to the Construction Input Index

→ Additional upgrades or benefits

→ Builder’s Loan (a loan taken in the buyer’s name but paid for by the builder during most of the construction period)

→ Other contractual and financial terms

The purchase price is not always the only thing worth negotiating.

In some cases, a more favorable payment schedule or terms may be worth as much to a buyer as a reduction in the headline price.

For a buyer coming from the U.S., that might mean structuring payments to allow additional time for currency planning, selling an overseas property, mortgage financing, etc.

Your Real Estate Attorney Should Be Part of the Strategy

A good real estate attorney does far more than review the contract. Your attorney should be looking at the transaction as a whole and suggest other potential avenues and terms for you to request and negotiate with the builder—to reflect your particular financial circumstances and goals.

An attorney who understands the Israeli market and regularly represents foreign buyers can help you:

→ Identify potential risks before signing

→ Understand how your funds will be protected

→ Negotiate more favorable contractual and payment terms

→ Consider the tax implications of your purchase

→ Structure the transaction around your broader financial plans

→ Coordinate with mortgage brokers and currency exchange professionals

→ Manage the entire transaction

The goal is not simply to get the deal done.

It’s to help ensure that the deal you sign makes sense for you.

The Opportunity Is About More Than the Exchange Rate

Buying property in Israel is a major decision, and no one should feel pressured to purchase before they are ready.

But waiting for the “perfect” exchange rate can keep you on the sidelines indefinitely.

No one can guarantee that the dollar will rise. And there is equally no guarantee that the property market will remain at today’s prices.

Rather than trying to predict the future, buyers should consider what opportunities are available today and how a purchase can be structured to manage the risks.

The right property, at the right price, with the right payment terms, may be a better opportunity than waiting for an exchange rate that may never return.

The key is having the right team around you to evaluate the opportunity, negotiate on your behalf, and structure the transaction in a way that gives you as much flexibility as possible.

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Yair Givati, Esq., is a seasoned Israeli real estate attorney, who specializes in helping foreign and English-speaking clients purchase property in Israel. Born and raised in Israel, with experience living and studying in the U.K. and U.S., he combines in-depth knowledge of Israeli law, taxation and bureaucracy with an understanding of the needs of international buyers.