New vs. Resale Home in Israel: Which is better?

Deciding between a new apartment and a pre-owned (resale) home is one of the most significant choices buyers face in Israel. Each option has unique advantages and potential challenges—the right choice depends on your priorities, including budget, risk tolerance, and long-term plans. Understanding the key differences can help you make an informed decision that aligns with your real estate goals.

Benefits of Buying a New Build in Israel

Purchasing off-plan before construction is completed offers financial and lifestyle advantages.

• Developers often provide early-stage discounts, typically 10% to 15%, especially before building permits are issued. Payment plans are designed to be flexible, allowing buyers to pay just 20% upfront, with the remaining balance due upon completion. This approach minimizes immediate financial pressure, making it easier to secure a home without selling an existing property first. Some developers also offer financing solutions, reducing reliance on bank loans during construction.
• New builds are attractive investments, with property values frequently increasing at two key points: when the building permit is issued and upon project completion. Buyers who enter the market early often see significant appreciation.
• For those planning Aliyah in the future, purchasing a new build allows for a smaller initial investment and the ability to defer mortgage payments until closer to the move-in date.
• Buyers purchasing during the construction phase may be able to customize interior finishes, modify layouts, and select premium materials.
• Israeli law offers a multi-year warranty for defects, covering structural issues, plumbing, and electrical systems.
• Modern construction adheres to updated safety, earthquake resistance, and energy efficiency standards, providing a more secure and cost-effective living environment.
• Many new projects include premium amenities such as secure lobbies, elevators, underground parking, storage units, gyms, and pools, though these features contribute to higher monthly maintenance fees.
• Unlike resale transactions, where the sale depends on the seller’s ability to find a new home, developers have inventory available for purchase, eliminating common delays and making the process more predictable.

Risks of Buying a New Build in Israel

Despite its advantages, buying a new build carries certain risks.

• Construction delays are a frequent issue, particularly given current labor shortages, supply chain disruptions, and geopolitical factors, making it difficult to predict exact move-in dates.
• New build prices are often linked to the Construction Cost Index, meaning costs can rise unexpectedly due to inflation and increased material expenses.
• Many developers impose restrictions on resale before the project is completed, limiting financial flexibility for buyers who may need to sell early.
• Registering ownership in the Tabu (Land Registry) for a new apartment can take years due to bureaucratic processes related to land division and registration. This delay can affect mortgage approvals, resale opportunities, and inheritance planning, making it an important consideration for buyers who need certainty in ownership status.

Why Choose a Resale Home in Israel?

For buyers prioritizing certainty and availability at a specific time, purchasing a resale home offers key advantages.

• Unlike new builds, where purchases rely on floor plans and digital renderings, a second-hand home allows buyers to inspect the property, evaluate its layout, assess the view, and understand the neighborhood’s character before committing.
• Established neighborhoods provide access to existing schools, public transportation, and shopping centers, eliminating the uncertainty of waiting for infrastructure development in new projects.
• Since resale homes are already constructed, ownership can typically be transferred quickly, allowing for a smooth and expedited move-in process.
• Unlike new build contracts, which are often tied to the Construction Cost Index, the price of a second-hand home is fixed at the time of purchase, eliminating concerns about cost fluctuations due to inflation.

Challenges of Buying a Resale Home in Israel

• While resale homes offer certainty and stability, they may require renovations, adding to the total cost of ownership. Many older apartments need upgrades to plumbing, electrical systems, and insulation, and the cost of renovations has risen significantly due to material shortages and increased labor costs since October 7.
• Older buildings may not meet modern safety, earthquake protection, and energy efficiency standards, leading to higher long-term maintenance expenses.
• In contrast to new developments that include modern features, many second-hand homes lack amenities such as elevators, private parking, and high-security entry systems, which may be important for some buyers.

Which Option is Best for You?

A resale home is ideal for buyers seeking certainty, immediate availability, and a property in an established neighborhood with a fixed purchase price. A new build may be the better choice for those comfortable with some uncertainty in exchange for potential appreciation, lower upfront costs, and access to modern amenities. The decision ultimately depends on financial goals, risk tolerance, and personal lifestyle preferences.