Hello,
Happy Sukkot to all!
Yesterday, sitting in the sukkah (our “temporary dwelling”), I found myself wondering: what does this temporary structure have to do with the bold real estate investments I am currently accompanying in Europe and the USA?
The answer is the most important lesson, one that can spare you unnecessary losses.
Here are 3 lessons the sukkah teaches us about investing abroad the right way:
“Permanent dwelling versus temporary dwelling”: the key to flexibility (and profit!)
We leave the comfortable home (the permanent dwelling) for the temporary sukkah. In real estate, this means you must diversify. Do not put all your money in one basket (one country, one type of property). If the apartment market in Berlin freezes, let the land in Florida work for you.
The message: a smart investor knows he needs to be as flexible as the walls of the sukkah. Always be ready to move, and do not get fixed on a single continent.
The fatal mistake: skimping on the “schach” (the sukkah roofing)
For a sukkah to be kosher, it needs roofing and walls. In real estate, the “schach” is your professional guidance!
The most common mistake I see: Israelis get excited about a property, close a deal quickly, and then discover that:
• They are exposed to a huge tax bill in Israel and abroad.
• Local regulation prohibited part of the intended use.
This happens because they skimped on due diligence and on a local international real estate lawyer. Do not skimp on the one who will protect your money!
“And you shall rejoice in your festival”: step out of the routine
Going out to the sukkah takes courage. Investing in real estate abroad takes similar courage: examine new markets (such as southern Europe, or technology-related properties) instead of following only what everyone else does.
The highest returns await those who are willing to dare, as long as they do it with close legal guidance.
To sum up: the sukkah is a lesson in flexibility and thoroughness. Do not let the big opportunities slip away, but build everything on a solid legal foundation!
This month we would like to draw your attention to:
A. Greece - new tax relief and investment incentives will offset services inflation.
B. The Greek real estate market: a doubling jump in prices and rents is leading to a supply crisis.
C. Apartments in Romania are selling faster, but the price is more open to negotiation.
D. The International Monetary Fund is demanding further reforms from Romania.
E. Romania - a step up in apartment prices, and VAT is shifting demand to the “second-hand” market.
F. The Cypriot real estate market in September 2025: moderate increases and regional gaps.
G. Bulgaria - the hot real estate market continues to break records on the road to the euro.
H. A paradoxical recovery: the new-build real estate market in Ukraine.
Moadim lesimcha (joyous festivals)
Adv. Ilan Leibovitch and the office team
Greece
New tax relief and investment incentives will offset services inflation
The Greek government continues to keep its fiscal balances well under control, which allows it to launch a significant stimulus package that supports growth. In the period January-August 2025, a primary budget surplus of 8.67 billion euros was recorded, significantly higher than the government's target.
In September, Prime Minister Kyriakos Mitsotakis announced a new relief package worth 1.7 billion euros. The aim of the package is to improve household disposable income, encourage consumption and strengthen the competitiveness of Greek exports.
- Tax relief for households: a prominent example is a further reduction in income tax for certain groups, intended to increase households' purchasing power immediately.
- Incentives for exporters and the productive sector: the government introduced special tax benefits and financial support for exporting companies, as part of a strategic move to increase the share of local production in the national product.
- Investment and infrastructure: special incentives are being given to accelerate gross fixed capital formation (GFCF), which already recorded a strong increase of 6.5% in the second quarter of 2025. The investments are focused on leveraging European Union funds (RRF) for projects in green energy and digitization.
The challenge: rising service prices
On the other hand, the main economic challenge remains high services inflation. Although overall economic growth (1.7% in Q2) continues to outpace that of the eurozone, services inflation, and especially the prices of housing (rent), vacations and restaurants, remains high and is expected to bring overall inflation for 2025 to about 3.1%, above the European Central Bank's target.
The real estate market: a doubling jump in prices and rents is leading to a supply crisis
The Greek real estate market has become a significant growth engine, pushing prices to levels not seen since the economic crisis. In the second quarter of 2025, apartment prices rose by 7.3% nationwide (year over year), and are now 5% above their previous peaks.
Demand hubs and average prices
Strong demand, supported by foreign investors and growth in the “Golden Visa” program (where applications rose by 31.9%), is concentrated in a number of areas:
- Thessaloniki leads the jump: the second-largest city shows the fastest growth rate among the metropolitan centers, with a price increase of 10.0% in the first quarter of 2025. The average price per square meter within the municipality of Thessaloniki stands at about 2,558 euros.
- Athens: distributed growth: in Athens, overall growth was more moderate (5.47% in the city center), but intense demand continues in the core areas and the affluent periphery. For example, central Athens recorded an average price of about 2,317 euros per square meter, while in the southern suburbs (the Riviera) growth was faster and the price of a unit can be much higher.
- The rest of Greece: housing prices continued to climb strongly in the major cities and islands that attract tourism and investment.
The rental crisis is deepening
Alongside rising purchase prices, there is a severe shortage of long-term rental supply, which is pushing rents up continuously. The shortage stems from the diversion of existing properties to the short-term housing market (such as Airbnb) and the slow pace of building new rental apartments. Data show that rent costs are now one of the main drivers of inflation in the services sector, placing a significant burden on Greek households.
Economic reports from major banks point to ambitious plans for the future, including a total investment of 45 billion euros in the real estate market by 2030, most of it (40 billion euros) directed to building about 350,000 new housing units in an attempt to narrow the current supply gap.
Our media coverage
Everyone is waiting for sharp declines, but the truth is simple: it will not happen - and the result is stagnation, not collapse. Those who keep sitting on the fence discover that time is just as expensive as money.
The old towers are making room for flexible, urban offices with real value for the people who work in them.
For those who look ahead, this is not a problem, it is an opportunity.
Those who wait for “stability” will stay outside, and those who dare now will take the opportunities others miss.
The true value of an office property is measured by its ability to attract companies that understand that designing a work environment is an investment, not an expense.
Romania
The International Monetary Fund is demanding further reforms from Romania
In September, Romania's economy was at the center of public and business discussion, as the conclusions of the visit of the International Monetary Fund (IMF) delegation raised significant concern about the country's fiscal condition. Reports in the Romanian business press stressed that despite the forecast of moderate growth, Romania is at a crossroads that requires full and uncompromising implementation of fiscal reforms in order to prevent macroeconomic deterioration.
The growth forecast is revised downward
According to data published following the visit of the IMF delegation (which stayed in Bucharest in early September), the Fund revised Romania's growth forecasts downward. The Romanian economy is expected to grow at a moderate 1% only in 2025, with a slight acceleration to 1.4% in 2026.
The Fund explained that the moderate growth results from an offsetting of opposing factors:
- 1. A moderating factor: the impact of fiscal adjustment measures intended to reduce the deficit, together with inflation that remains high (9.9% in August), is leading to a slowdown in private consumption.
- 2. A supporting factor: an expected acceleration in public investment, especially investment financed through European Union funds under the NextGenerationEU program, which will help stabilize GDP.
The deficit: the central challenge and the IMF's ultimatum
The most pressing issue remains Romania's high budget deficit, known as the “twin deficit” (because it is combined with a wide current account deficit). Prime Minister Ilie Bolojan confirmed that it was agreed with the European Commission that Romania will end 2025 with a budget deficit of 8.4% of GDP - a figure that underscores the size of the required gap.
In the IMF report's summary it was made clear that the fiscal reform package adopted for 2025-2026 is an “important step forward,” but it is not the final word. The Fund called for full and uncompromising implementation of these reforms, and stressed that additional adjustment measures from 2027 are critical in order to bring the fiscal deficit back below the 3% of GDP target required by the European Union.
One of the IMF's most detailed recommendations concerned the structure of the tax system. The Fund proposed shifting the tax burden that currently rests on labor (which is one of the highest in the European Union in Romania's lower income brackets) toward consumption taxation and capital taxation. This strategic change, according to the Fund, could yield additional state revenue of at least 1.2% of GDP as early as 2025.
In addition to tax reforms, the Fund stressed the need for broad structural reforms, including strengthening the efficiency of the state apparatus, as an essential way to maximize the use of European funding and generate sustainable economic growth.
The IMF warned of a continuing risk of a downgrade of Romania's credit rating, driven by ongoing concern about the government's ability to carry out the fiscal adjustment plan in a way that ensures medium-term financial stability.
Regarding monetary policy, it was stated that the approach of the National Bank of Romania (BNR), which continues to be cautious, remains appropriate. The Fund recommended that interest rate cuts be resumed only after inflation enters a solid downward trend, which is expected only toward the end of 2026.
A step up in apartment prices, and VAT is shifting demand to the “second-hand” market
In September 2025, the Romanian residential real estate market showed a picture of continued price increases and a dramatic shift in demand, driven largely by changes in tax policy.
The dramatic effect of VAT on the new-apartment market and the move to second-hand
The main and most striking change concerns the VAT increase on new apartments, which came into effect in early August (a rise from 9% to 21% on apartments up to 120,000 euros, and from 19% on apartments above that amount).
- Demand shifting: this increase, which makes new apartments tens of thousands of euros more expensive, led to a significant shift in consumer demand toward the older apartment market (second-hand). Older apartments are not subject to the VAT change, which made them more attractive in terms of the final cost to the buyer.
- The “second-hand” market heats up: real estate analysts reported in September two hot spots:
- 1. Shorter sale times: in the older-apartment segment there was a shortening of the average time needed to sell (time-to-sell), especially among properly priced properties in the big cities.
- 2. Expectation of price increases: buyers shifting their demand to “second-hand” are expected to push the prices of older apartments gradually upward, because the excess demand creates positive pressure on prices in this segment as well.
The outlook: continued price increases and record investment activity
Most buyers (about 65%) and experts expect a further rise in prices during 2026, driven by persistent inflation, rising construction costs and a relatively reduced supply of new apartments.
At the investment level, the fourth quarter of 2025 (which has begun) is expected to be especially intense. Investors are rushing to channel capital into the real estate market to take advantage of current conditions, mainly because of the expected increase in taxation of dividends from 2026.
The rental market at its peak: supply jumps and rental times shorten in the big cities
The Romanian rental market reached its traditional peak of activity in September 2025, a month characterized by the return from vacations and the start of the academic year. The data showed that the market remained highly dynamic, especially in university cities and economic centers such as Bucharest.
Key data from the rental market in September:
- There was a significant 42% increase in the supply of apartments for rent in September 2025 compared with September 2024. This increase reflects greater activity by property owners and agencies in listing properties ahead of the peak of the season.
- Although demand continued to be high, the most interesting figure is that apartments that matched search criteria were rented faster than in the previous year. The average time a listing stayed online was shortened by 15% compared with September 2024.
- The rental market is expected to remain hot even after the September peak. In addition to steady demand from students and workers, it was reported in the press that an increase in taxation of owners of rental properties is expected to lead to further upward adjustments in rental prices in the near term, as owners pass the costs on to tenants.
The main changes in rental taxation are:
1. Higher income tax:
- The formal deduction is smaller: income tax (at a rate of 10%) is now levied on 80% of gross rental income. This is instead of the 60% that was customary in the past.
- The meaning: the government is reducing the recognition of expenses for tax purposes, which enlarges the taxable base of the income and makes the effective tax liability higher.
2. Obligation to pay health insurance (CASS):
- A new threshold: a property owner must pay health insurance contributions (CASS) at a rate of 10% if his annual net rental income passes a certain threshold (equal to 6 gross annual minimum salaries in Romania).
- The jump in cost: the biggest concern for property owners is that a small increase in monthly rent can push them above this threshold, causing them to pay a significant additional amount for health insurance.
- The result: to cover this tax liability and the new CASS liability, many property owners are raising the rent on tenants.
3. Bureaucratic relief:
- Annual reporting only: instead of monthly or quarterly reports, property owners now file the final report and make the tax payment only once a year (in May of the following year).
Bulgaria
The economic momentum continues
The September 2025 data point to continued recovery and growth in the Bulgarian economy. The monthly report of the National Statistical Institute (NSI) notes that the composite business climate indicator rose by 0.6 percentage points, thanks to positive momentum recorded mainly in two key sectors:
- Industry and retail: the indicator in the industrial sector rose, and entrepreneurs' assessments of the current business situation improved accordingly. The most dramatic improvement was recorded in retail trade, where the indicator rose by 6.2 percentage points, in light of positive expectations regarding orders.
- GDP growth and forecasts: the macroeconomic data support the positive sentiment. Bulgaria's economy recorded growth of 0.9% in the second quarter of 2025, and the European Bank for Reconstruction and Development (EBRD) revised upward its overall GDP growth forecast for 2025.
The hot real estate market continues to break records on the road to the euro
The Bulgarian real estate market remains one of the most dynamic and fastest-growing markets in Europe, with sharp price increases and new records in mortgage volumes. September 2025 reflects a market driven largely by anticipation of entry into the eurozone (planned for January 2026) and attractive interest rates. Bulgaria is surging in European housing price indices, showing an annual increase of 15.5% in prices (as of the second quarter of 2025), one of the sharpest increases in the entire European Union.
This unprecedented acceleration is driven by a critical combination of two factors:
- 1. Historically low interest rates: the average interest rate on Bulgarian mortgages remained around 2.74% in September 2025 - a record low that aggressively stimulates demand.
- 2. The rush for the euro: local and foreign buyers are hurrying to close deals before January 2026, the expected date of Bulgaria's entry into the eurozone. The prevailing fear is that this step will lead to a further, significant rise in prices.
The result is an all-time high in mortgage volumes: as of August 2025, the volume of housing loans reached 30.2 billion leva (about 15.4 billion euros), an astonishing increase of 27.4% within a single year. This is an unprecedented pace of activity that indicates deep public belief that the surge will continue.
Prices per square meter in the major cities:
The gaps between cities still allow opportunities to be found, but prices continue to climb:
- Sofia, the capital, leads in prices with an average range of 1,980 to 2,250 euros per square meter. The premium areas in the capital saw an even sharper rise.
- At the same time, other major cities also show high figures:
- Varna, the capital of the Black Sea coast, ranges between 1,550 and 2,500 euros per square meter.
- Burgas, a strategic port city, is priced between 1,200 and 2,000 euros per square meter.
- Plovdiv, the second-largest city, remains more attractive, in the range of 1,150 to 1,500 euros per square meter.
From the writer's desk:
The fast pace of price increases (15.5%+) and the unprecedented mortgage volumes indicate that the market is at peak activity, probably under the influence of the anticipated entry into the eurozone; investors should consider acting quickly to benefit from the existing leverage and the historically low interest rates (about 2.74%) before a possible change in local policy or a further rise in prices after the move to the European currency.
The general improvement in the business climate in industry and retail and the positive GDP forecasts provide a stable economic foundation for new real estate projects, especially in areas focused on demographic growth (Sofia) or on income-producing real estate (the Black Sea coasts). At the same time, one must take into account the continuing shortage of local labor and the reports of rising payment delays in the construction sector, which requires careful risk management and more conservative cash-flow management in new projects.
Cyprus
The Cypriot real estate market in September 2025: moderate increases and regional gaps
The real estate market in Cyprus continues to prove its resilience, but with clear signs that the market is entering a more balanced and more complex stage. September 2025 finds the island at a crossroads, with foreign demand remaining high, while the prices of new properties show very different trends from city to city and between property types.
Impressive sales momentum for 2025
Despite general signs of economic slowdown in the country, the real estate market has continued to show impressive strength so far. In the first eight months of 2025, there was a jump of about 13% in the number of sale contracts filed with the authorities, compared with the same period last year. At the same time, August and September signaled a slight pause for breath - a minor decline that currently looks like a “pause” in momentum rather than a reversal of trend.
A mixed price picture: Limassol keeps racing ahead
A close look at average prices per square meter reveals that Cyprus operates as two separate markets: the premium market and the market intended for locals. The national house price index showed a moderate annual rise, but the real trend lies in breaking the data down by district:
- Limassol - the price record-holder: Limassol remains Cyprus's undisputed real estate stronghold and the most expensive. The city, which is the business and technology heart of the island, continues to lead in prices and transaction volume, relying on strong demand from foreign investors and luxury marine projects that attract an affluent audience. Average residential property prices in the city range around 3,200 euros per square meter, with prime areas regularly crossing that bar.
- Nicosia: the capital offers more affordable prices, serving as a stable anchor for local investors. Average prices range around 2,500 to 2,800 euros per square meter, and Nicosia continues to record consistent growth in transaction volume.
- Paphos and Larnaca - value and yield: Larnaca shows the most accessible prices among the main coastal cities (an average of 1,500 to 2,000 euros per square meter), but new projects near the marina and the port are expected to push this bar upward. Paphos presents a split picture: prices of luxury villas continue to jump, while prices of older apartments tend to erode.
The rental market: a solid growth engine
While the sales market is experiencing stabilization, the rental market has remained solid and even recorded a jump in terms of prices. Growing demand for housing, among others from high-tech workers, foreign workers and students, is pushing rents upward, especially in Limassol.
For investors, the good news is that rental yields remain stable and attractive, in an average range of 4.8% to 6%. This trend indicates that even in a period of global economic uncertainty, the Cypriot property retains its value as a stable income generator.
From the writer's desk:
The Cypriot real estate market does not march as one block. It divides into different sub-markets - the Limassol luxury market, which remains dominant with the highest prices per square meter, and the Nicosia and Larnaca markets, which offer better-established growth opportunities. Investors should focus on a targeted, regional selection to ensure they “win” the local real estate race.
The real estate race in Cyprus is not only about the highest price; it is about smart choice. Is it better to pay Limassol's premium price for the “safe” option, or to enjoy the growth potential and more affordable prices of Larnaca or Nicosia? The answer now depends more than ever on one's personal investment strategy. While Limassol attracts foreign “elite capital,” the sub-market attracts the Cypriot upper-middle class and foreign investors looking for a first entry point to the European market.
Ukraine
A paradoxical recovery: the new-build real estate market in Ukraine - between an immediate shortage and a future construction wave
The real estate market in Ukraine, and in particular the new-construction market, has presented in recent months a complex and paradoxical picture, signaling strengthening investor confidence alongside immediate price pressures. These trends indicate a significant recovery, mainly in the west of the country and in the capital region.
1. Short-term price pressure: a double-digit increase in Kyiv
Despite the situation, the new-construction market in Kyiv continues to show surprising resilience and is on a trend of sharp price increases. After an average rise of about 14% in the first half of the year, real estate experts estimate that prices in new buildings are expected to jump by a further 10%-15% by the end of 2025.
The causes of the immediate price increase are a combination of:
- A plunge in immediate supply: the number of active projects for sale is significantly lower than in the pre-war period, and the volume of completed apartments is about 15%-20% lower than in the previous year.
- Stable and strong demand: demand for safe, modern housing remains stable, partly thanks to government mortgage programs.
- Rising inputs and construction costs: more expensive raw materials, a shortage of skilled labor and expectations of future depreciation of the local currency (the hryvnia) are pushing contractors to raise prices.
2. A huge construction wave: a clear sign of investor confidence
Alongside the immediate supply shortage, there has been an impressive jump in the number of planned construction starts - clear evidence of investor and developer confidence in the long-term outlook of the market.
First-quarter 2025 data show:
- A nationwide jump: the total area of new residential buildings that received building permits jumped by about 45% in the first half of 2025 compared with the same period in 2024.
- Growth hubs: the Kyiv region leads the jump with an increase of about 130% in the new residential area announced in the region, followed by the Lviv region with growth of 65%.
- Challenge versus potential: it is important to note that despite the jump, the market is still far from the construction volumes of 2021, before the war, and a return to those levels is not expected before the end of 2027. In addition, in certain areas there are reports that the volume of new projects launched by developers is growing faster than consumers' current purchasing power, which points to potential sales challenges.
From the writer's desk:
The real estate market in Ukraine is now characterized by regional divergence: while conflict areas are frozen, the western regions and the area around Kyiv show high levels of recovery. The sharp rise in construction starts reflects confidence that the country will move to a stage of extensive reconstruction. For investors, the trend represents an opportunity to re-enter the market or increase exposure, while focusing on the areas leading in demand (Kyiv and Lviv) and examining the risks related to labor shortages and rising construction costs.
Accurate as of the issue date. Laws, tax rates and procedures change; check the current position before any decision.
Translated from the Hebrew original. עברית