"Forbes" sees promise in Israeli real estate

The magazine finds values rising as the IMF projects GDP growth of 3.8%.

"Forbes" notes, "Israel's real estate market struggled in the late 1990s and early 2000s as the country grappled with deflation. As late as 2006, market weakness had pushed prices down 4%, according to Knight Frank, a London-based real estate research company. But last year prices climbed 2%. That is expected to continue, given the country's robust 5.1% 2007 growth in gross domestic product and a 3.8% projection for this year, according to the International Monetary Fund."

"Forbes" looked at economic expansion, inflation rates, strength of individual property rights and access to lending in emerging markets, to examine housing conditions in capital cities and business centers. These markets are not expected to explode in value in the next six to twelve months, but in the next five years, they will likely have proved to be worthy investments. The magazine defined emerging countries as those transitioning from developing to advanced. Brazil, Russia, India and China are the most commonly cited examples.

"Forbes" writes, "Israel is a strange duck in the context of emerging markets, because there's some argument as to whether it belongs in the ranks of fully industrialized markets. Tel Aviv, the nation's leading real estate market, is still finding its legs following a late 1990s and early 2000s price slump. But macro conditions in Israel favor more wealth creation, as the economy has corrected its deflation problems and grown at a 5% rate for two years.

Second place in the "Forbes" ranking is Malaysia and its capital, Kuala Lumpur, which benefit from its proximity to India, China, and Japan, as well as its excellent commercial relations with the US.

Published by Globes [online], Israel business news - www.globes-online.com - on April 3, 2008

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