Weakening dollar cools US demand for Israeli property; French, British buyers surge

But American buyers are still purchasing more expensive properties than the French, and location trends are shifting, first-of-its-kind analysis finds

A sharp decline in the value of the US dollar has cooled American demand for Israeli real estate in recent months, while purchases by French and British nationals have surged, according to a recent Finance Ministry report.

American buyers comprised 49 percent of all foreign property purchases in the first quarter of 2026, compared to 60% a year earlier, the report found. However, the homes they acquired were significantly more expensive than those bought by other foreign nationals.

The analysis, published last week by the ministry’s Chief Economist’s Office as part of its March 2026 residential real estate review, provides the government’s first detailed breakdown of foreign property purchases based on the country where the buyer’s passport was issued.

The study found that buyers from the United States, France, and the United Kingdom accounted for 87% of all residential properties purchased by foreign citizens during the first three months of the year.

American buyers bought 238 apartments in the first quarter of 2026, compared to 248 during the same period in 2025. Over the same period, purchases by French citizens jumped to 130 apartments, from 84 in the first quarter of 2025, while those by British buyers rose to 57, from 37 a year earlier.

Government economists attributed the slowdown directly to a 13.6% depreciation of the US dollar against the Israeli shekel, which effectively made Israeli real estate significantly more expensive for buyers relying on American currency. By contrast, the euro weakened by only 4% against the shekel over the same period.

Canadians bought 16 apartments during the first quarter of 2026, and Australians purchased 10, the report noted.

The report also found shifting trends in geographic and economic preferences between nationalities. Among Americans, more than half (52.5%) of purchases were in Jerusalem, at a median price of NIS 5.1 million ($1.75 million). Surprisingly, Netanya overtook Beit Shemesh for second place among Americans, with 27 apartments sold in the quarter compared to 24 in Beit Shemesh. Kiryat Gat ranked fourth with 11 transactions, and Tel Aviv placed fifth with just 10.

Among French buyers, Netanya was the most popular destination with 35 apartments sold during the quarter, while Jerusalem and Tel Aviv tied for second place with 28 each. Bat Yam recorded 12 transactions, while Ashdod, historically a major hub for French real estate investment, saw just five purchases.

French buyers focused on more modest homes than their American counterparts, with an average purchase price of NIS 2.8 million ($962,000), the report noted.

The shift in foreign investment comes amid a broader cooldown in Israel’s housing market. Total residential transactions fell eight percent year-over-year in March, the Finance Ministry said, a drop that economists partially attributed to the impact of the IDF’s Roaring Lion military operation against Iran.