Generation Z (born 1996–2016) is stepping into Israel’s real estate market in a major way. From their first investments to their career choices in property, Gen Z is reshaping housing demand, development strategies, and even how homes get bought and sold.
Below is a comprehensive list of the top 9 takeaways on how Gen Z navigates and impacts Israeli real estate today. Let’s dive in.
1. Gen Z’s Early Moves in the Market
Overview
Gen Z isn’t waiting around. Despite young adulthood typically being a stage for renting or sharing living space, many Gen Zers are already eyeing properties—sometimes with the help of family or by teaming up with friends. Born into an era of high housing costs, they’re forced to be strategic, often focusing on smaller apartments or outlying areas to start building equity.
Best Feature: Long-Term Vision
- Many can’t afford Tel Aviv or Jerusalem, so they purchase in more affordable locales and rent those properties out.
- Even if they don’t live in these initial investments, the goal is to climb the property ladder early.
2. Homeownership Trends
Are Gen Z Israelis actually buying homes?
A relatively small percentage of Israelis in their mid-20s to early 30s own a home—somewhere around 15%. Additionally, around 40% of younger adults say they don’t see themselves purchasing property in the near future due to the financial squeeze. Even so, the desire to own is strong, and many plan to achieve ownership by around age 30 if possible.
Best Feature: New Construction and Fixer-Uppers
- Those who do buy favor modest apartments, sometimes “off-plan” (before construction) for better pricing and financing.
- Older buildings in peripheral cities can be purchased for less and renovated over time, making them ideal for young buyers looking to add value and build equity.
Preferred Locations and Reasons
- Prohibitively expensive major cities push Gen Z buyers toward more budget-friendly areas like Be’er Sheva or certain suburbs in central Israel.
- Teaming up with peers or relying on parental support helps them meet hefty down payments and mortgage qualifications.
3. Renting vs. Buying Preferences
Renting or Owning—Which Do They Prefer?
Around 85% of Israelis aged 25–34 do not currently own a home. Many rent or stay with parents until their late 20s. Renting often isn’t a real preference so much as a necessity—affordability is the biggest roadblock to owning.
Best Feature: “Rent Trap” Effect
- High rent consumes a large chunk of Gen Z’s income (over 40% for some), making it tough to save.
- Sharing apartments or living with family helps curb costs until they can afford a down payment.
Why So Many Stay in Rentals
- Entry-level wages are rarely enough for big mortgages.
- Larger down payments (at least 25% in many cases) make ownership unattainable without financial assistance.
4. Investment Strategies
Are Gen Z Investing Just for Income?
Yes—some Gen Zers have found creative ways to profit from real estate, even if they can’t afford prime properties to live in. Their overall approach is bold and resourceful:
- Co-ownership: Splitting the cost with friends or relatives.
- House Hacking: Renting out spare rooms or units to cover mortgage payments.
- Short-Term Rentals: Airbnb arbitrage, subleasing for a higher nightly or weekly rate.
- Flipping: Buying cheap fixer-uppers, renovating, and selling or renting out at a profit.
- Co-living Spaces: Transforming larger homes into multiple micro units for higher combined rent.
- Crowdfunding and REITs: Investing smaller amounts for partial ownership in bigger real estate projects.
Best Feature: Tech-Driven Mindset
- Gen Z is well-versed in online learning, social media marketing, and data analysis tools to find profitable niches and manage properties more efficiently.
5. Challenges and Barriers to Entry
Economic Obstacles
Housing prices are skyrocketing, outpacing salaries. As a result, more young adults live with parents or rent for extended periods. Higher interest rates and stricter lending requirements add to the affordability crunch.
Best Feature: Investor Competition
- Seasoned investors with larger capital reserves often outbid Gen Zers.
- Government efforts like higher purchase taxes on second homes aim to reduce investor dominance but only offer partial relief.
Beyond Housing Costs
- General cost of living in Israel is high, making it tough to save.
- Economic uncertainties—unstable job markets or short-term contracts—further discourage long-term mortgage commitments.
6. Joining the Real Estate Profession
Why Become an Agent?
Gen Z sees real estate not only as a place to live or invest but also as a career. Getting a real estate license can be simpler than pursuing traditional corporate paths, offering more flexibility and potentially lucrative commissions.
Best Feature: Early-Career Advantages
- Younger agents are naturally adept with social media, virtual tours, and online branding, helping them stand out.
- They relate well to fellow young adults who need guidance through first-time homebuying or renting processes.
Challenges
- Building credibility takes time. Clients may be cautious about trusting a 20-something with a major transaction.
- No salary base—success hinges on networking, hustle, and commission-based earnings.
7. Social Media’s Big Impact
How Gen Z Real Estate Pros Leverage Social Platforms
From TikTok to Instagram, Gen Z agents and investors use social channels to showcase listings, share market insights, and brand themselves as approachable experts. This modern approach often resonates with peers, attracting younger clients.
Best Feature: Interactive Marketing
- Virtual open houses on Facebook or Instagram Live.
- Eye-catching Reels or TikTok videos showing property tours.
- Facebook groups for niche communities (students, new immigrants, etc.) to help match specific property needs.
Why It Matters
- Low-cost or free marketing that can generate leads quickly.
- Builds trust and transparency through Q&A sessions, behind-the-scenes content, and real-time communication with potential buyers or renters.
8. Money-Making Tactics and Success Stories
Profiting in Spite of High Prices
Despite obstacles, many young Israelis earn money in real estate via commissions, flipping, or building side hustles around short-term rentals and property management. Some turn small successes into full-scale businesses, building teams or portfolios by their late 20s.
Best Feature: Airbnb & Rental Arbitrage
- Renting a property long-term, then subletting it on short-term platforms for a profit.
- Managing multiple units for out-of-town landlords, pocketing management fees while perfecting marketing strategies.
Inspirational Examples
- Individuals who saved from military service, purchased one low-cost apartment, renovated it, and repeated the cycle to build a successful portfolio.
- Ambitious young agents who started on rentals and leveraged social media to expand into high-value sales within a few years.
9. Government Policies Affecting Young Buyers
Discounted Housing and First-Time Benefits
Programs offering discounted apartments via lotteries or lower purchase taxes can give Gen Z a fighting chance in the pricey Israeli market. For example, specific initiatives allow young buyers to snap up homes below market value—if they win the lottery draw.
Best Feature: Tax Breaks for New Buyers
- Reduced or zero purchase tax up to certain price thresholds eases the upfront financial burden.
- Subsidized mortgages—though limited—sometimes offer slightly lower rates or grants in peripheral regions.
Reality Check
- Not everyone can win a housing lottery.
- High interest rates still affect affordability, and official programs are small in scale relative to overall demand.
10. Key Cities and Regions to Watch
Where Do They Buy, Rent, and Invest?
- Tel Aviv: Top choice to live, but sky-high prices force most Gen Zers to rent or focus on short-term sublets.
- Jerusalem: Similarly expensive; younger adults often move to nearby towns for cheaper housing.
- Be’er Sheva: A magnet for students and first-time buyers looking for affordability and solid rental yields.
- Other Periphery Areas: Smaller cities like Kiryat Gat, Ashkelon, or up north in Haifa are prime spots for more budget-friendly entries into the market.
Best Feature: Growth Potential
- Peripheral cities offer lower prices, which can lead to higher rental yields and potential for property appreciation if demand continues to spill out of expensive metros.
Anything We Missed?
Those are the top insights on how Gen Z is making waves in Israel’s real estate market. They’re creative, tech-savvy, and determined to overcome financial hurdles and achieve real estate success—whether by investment, homeownership, or professional involvement in the industry.
What do you think about these strategies and trends? Let us know!
