Israel’s Iron Dome anti-missile system intercepts rockets launched from the Gaza Strip, as seen from Ashkelon, in southern Israel, Oct. 15, 2023. Photo: REUTERS/Amir Cohen

Israel’s real estate market has taken a hit due to the war with Hamas terrorists in Gaza, but Israelis are nonetheless preparing for a surge in new occupants once the fighting ends.

Beyond people being less likely to buy in uncertain times, a key reason for the current downturn has been a lack of labor.

In recent decades, Israel’s construction industry has become increasingly reliant on labor from Arab workers. These laborers have come from either Gaza or the West Bank. Some live in East Jerusalem.

Due to the security situation of the ongoing war, the Israel Defense Forces (IDF) have stopped people with those permits from entering Israel. As a result, construction sites sat dormant for most of October. The conflict began with Hamas’ Oct. 7 massacre across southern Israel.

Part of the construction workforce is also comprised of Chinese workers, many of whom returned to China. It is unclear when they will return.

Ayelet Shaked — who served as Israel’s interior minister from 2021 to 2022 and has since started a career in real estate as chair of one of the country’s largest firms — told Hebrew-language media that despite the war, interest is again rising for real estate.

“We estimate that the market will recover quickly after the war,” Shaked said. “The market is tough, there is a demand for apartments, and this demand will remain and increase. I foresee a large influx of Jews from abroad after the war. The real estate industry is clearly affected by the fact that the Palestinian workers do not come to work in Israel during the war.”

There has been a global spike in antisemitism since Hamas’ Oct. 7 onslaught, especially in the US and Europe, where Jewish communities have experienced a record number of antisemitic incidents.

In such an environment, many Israelis in real estate expect to a surge in immigration — in turn boosting the real estate market — once the war in Hamas-ruled Gaza ends.

“Over the next few years, we anticipate a million new immigrants due to the increasing antisemitism in Jewish communities around the world,” Maj. Gen. (res.) Doron Almog, chair of the Jewish Agency for Israel, told the Israeli media outlet N12

Immigration groups have already noted a rise in applications for citizenship to Israel.

Any individual with at least one Jewish grandparent is eligible for immigration to Israel under its immigration laws. The “Grandfather Clause,” as it is known in Hebrew, is due to the fact that the Nazis classified anyone with at least one Jewish grandparent as Jewish.

The Israeli government often formulates plans for the absorption of large numbers of Jews. Assuming construction can return to its normal pace with available workers, there are tens of thousands of apartment units that are either currently in the construction phase or planned to break ground in the near future.