New Data: Number of Owners with 9+ Apartments in Israel Jumped by 20% in Two Years
Tax Authority data reveals that during the war, the number of real estate investors in Israel grew at a much higher rate than single-apartment buyers. The most significant increase, 20%, was recorded among those holding nine or more apartments.
Is it worth investing in real estate in Israel? The standard answer is that there were better times for this: interest rates are high, yields are low, and the risk of price declines is rising. However, data from the Tax Authority, obtained by Globes, reveals a different trend: during the war, the number of real estate investors in Israel grew at rates much higher than those of single-apartment buyers. The group that stood out most was that of the "apartment collectors" holding nine apartments or more.
In the past, the Tax Authority determined that renting out more than 10 apartments should be taxed as a business. However, this is not a binding instruction, and courts are still required to decide whether such activity constitutes passive income or a business in every respect.
According to the Tax Authority's basic data, there are about 1.77 million households in Israel that own one apartment, plus about 424,000 investors who own at least two. These hold more than a million apartments in total, although the exact number is difficult to determine due to partial ownership. These figures are consistent with last year's CBS data, according to which about 30% of all apartments in Israel—about 900,000—are used for rental purposes.
A Sharp Jump in Heavy Apartment Collectors
While the number of single-apartment owners has risen by 8% since the beginning of 2024, the number of owners with more than one apartment has increased by 13%. The number of "heavy collectors" holding five or more apartments reached about 12,000 this year, a 17% increase. At the top of the pyramid, those holding nine or more apartments grew from 891 at the beginning of 2024 to 1,067 last month—a 20% rise.
On the other hand, the Ministry of Finance's Chief Economist notes that investor participation is low, reaching about 15% of all activity, and that investors are selling more than they buy. However, these figures do not account for apartments reaching new hands through inheritance or combination deals with developers, which the Tax Authority tracks more effectively.
From Passive Investment to Managed Business
The growing number of heavy investors suggests that once a certain asset threshold is reached, standard investment formulas no longer apply. An investor with ten or more assets is not a passive earner but a business owner who requires active management and is less affected by short-term market fluctuations.
This sophisticated group is taking advantage of the current decline in market demand to strengthen its real estate holdings. The social implications are clear: economic gaps are widening, as young couples struggle to enter the market while an affluent class expands its portfolio. This trend is also reflected in recent mortgage data, which show an increase in loans taken for luxury apartments worth 5 million shekels or more.
