Peace dividend: Israeli real estate rebounds strongly

Investors on the Tel Aviv Stock Exchange (TASE) sent a strong signal of relief and optimism Sunday following the announcement of a ceasefire agreement between Israel and Hamas, coupled with the anticipated return of Israeli hostages from Gaza. 

The market responded with a broad-based rally, led decisively by the real estate sector.

According to Israeli financial daily Globes, the market surge reflects a cautiously renewed confidence in the country’s near-term outlook — politically, socially, and economically. Shikun & Binui shares rose 10.5%, Israel Canada jumped 10%, and Azorim gained 9%, marking one of the sector’s strongest sessions in recent months.

The Tel Aviv Construction Index advanced by nearly 7%, and the Tel Aviv Real Estate Index followed with a 5% rise. “Almost all the stocks on both indices moved upward,” noted Globes, a sign that investors view the ceasefire not as a temporary truce, but as the potential start of a new economic cycle.

Analysts point to speculation that the Bank of Israel could respond to de-escalation by lowering interest rates as soon as its November policy meeting. 

With inflation showing signs of stabilization and geopolitical risk potentially subsiding, monetary easing is back on the table.

Such a move would directly benefit the real estate industry — a sector highly sensitive to financing costs and consumer sentiment. Lower interest rates reduce borrowing costs, encourage home purchases, and provide much-needed breathing space for heavily leveraged developers.

Investor Sentiment: From Anxiety to Momentum

Yossi Avrahami, chairperson and founder of the construction group that bears his name, described the market’s reaction as more than just a financial rebound.

“The signing of the agreement and the hope of the hostages coming back within the next few days have created a positive atmosphere on a scale that the whole country has been waiting for,” he said.
“If the agreement is implemented, it will be a mighty turning point that will bring security, stability, and renewed confidence — first of all in people’s hearts, and from there, in the Israeli economy.”

Avrahami also floated the potential return of foreign Jewish investors, particularly those who had paused activity amid the war, and added that construction input prices may decrease as global supply chains stabilize post-conflict.

Beyond Real Estate: A Broader Rebound?

While real estate stocks led the charge, investors are also watching the tech sector, defense industries, and consumer-facing industries for signs of a broader post-conflict rebound. 

“The economy lives on confidence and movement,” Avrahami added. “When the atmosphere shifts, the ripple effect is felt across all sectors.”

For now, the Tel Aviv rally is being interpreted as a vote of confidence in peace — or at least a durable pause in violence. But with implementation of the agreement still in its early stages, many investors are cautiously optimistic, choosing hope while staying alert.