Hello everyone!
The Bank of Israel Governor's cut of the interest rate to 3.75% is an encouraging sign for the real estate market in Israel, while at the same time the strengthening of the shekel against the dollar and the euro makes real estate abroad cheaper for the Israeli investor and opens the door to new campaigns for Israeli developers and marketers of projects abroad. At the same time, the continued trend of rate cuts, also in order not to intervene in the foreign exchange market through dollar purchases by the Bank of Israel, will stimulate the local real estate market even further and is expected to bring buyers back to the sales offices.
It is important to remember that from 20/5 a European Union regulation took effect across Europe requiring short-term rental platforms to report to the national tax authorities on the income of the properties listed on them, and at the same time to remove from the platforms properties that do not have a short-term rental license.
This month we would like to draw your attention to:
A. Greece: inflation jumped to 5.4% in April.
B. Romania: the central bank left the interest rate at 6.5% against the background of stagflation risks.
C. Romania: a giant deal for AFI.
D. Cyprus: apartment prices continue to rise.
E. Portugal: foreigners make up 28% of the real estate market.
F. USA: what the appointment of the new Fed chair means for real estate investors.
Enjoy the read,
Adv. Ilan Leibovitch and the office team
A new European regulation changed the rules of the game in short-term rentals
On May 20, Regulation 1028/2024 (EU) took effect - for the first time in the history of the European Union, a uniform framework for the registration and reporting of properties rented out short-term. The platforms Airbnb, Booking, Vrbo and others must now verify and display a standard registration number on every listing, and transmit activity data to the authorities every month. A listing without a standard number is removed automatically within 10 working days.
Until now every country (and sometimes every city) ran different rules, and enforcement was almost impossible. What changed on May 20 is the simultaneous start of operation of four operational mechanisms in all 27 EU countries:
- Mandatory registration - every short-term rental property must have a national registration number displayed on all platforms.
- Monthly reporting - large platforms are required to transmit activity data (address, nights, guests) to the authorities every month.
- Automatic removal - an order from a local authority = removal of the listing within 10 working days; in serious cases - 48 hours.
- Cross-border enforcement - a Spanish authority can ask Airbnb (registered in Ireland) to remove a listing of a German operator.
The regulation does not prohibit short-term rental - it makes it transparent. This means that those who comply will continue to operate, and those who do not will be removed. The market is being cleaned of players who operated in the shadows, and for compliant properties this may actually be good news: less competition, more stable demand, and higher prices.
What actually happened
Even before the regulation took effect, the market had already responded. The analytics company AirROI tracked 124,500 active listings in 6 large markets between May 2025 and April 2026:
- Paris: a decline of 22.9% - about 12,700 fewer listings in a year. From the peak in July 2025 - a decline of 25.3%.
- Madrid: a decline of 15.3%. Barcelona: a decline of 11.6% - after a 64 million euro fine that Spain imposed on Airbnb.
- Rome: almost zero change (+0.07%), because Italian enforcement (the CIN number) already began in January 2025, and whatever was to be cleaned was cleaned.
- Berlin: municipal reports indicate more than 8,000 apartments returned to the long-term rental market.
Airbnb responds - and big
It is no coincidence that on the day the regulation took effect Airbnb announced a deep strategic shift: boutique hotels, car rental, grocery delivery, airport transfers and luggage storage - all from within the app. CEO Brian Chesky said explicitly that he is building “the Amazon of travel services.” The simple interpretation: when the core business (apartments) is narrowed from the regulatory side, additional sources of income are sought.
From the writer's desk:
What this means for the Israeli investor
If you bought a property with the aim of renting it short-term in Europe - this regulation affects you directly. It is important to check now:
1. Do you have a standard registration number in the country where the property is located? Without a number - the platform will remove your property.
2. Does your property management contract define who is responsible for compliance? It is important to examine who bears liability in the event of a forced removal.
3. Is the property in a market with a cap on nights? Paris (90 nights for a main residence), Amsterdam (30 nights), Barcelona (gradual abolition by 2028) - every market is different.
What this means for the Israeli developer developing abroad
If you are developing a project in which some of the units are intended for short-term rental - these are points to examine at the planning level, not after the fact:
- What is the local licensing framework? Does the municipality in whose area the project is being built permit short-term rental? A special license may be required.
- If you are selling units to Israeli investors with a promised yield from short-term rental - make sure the legal model holds up under the new regulation.
Greece
Inflation jumped to 5.4% in April, and rent exceeds 153% of the minimum wage
The National Statistical Service (ELSTAT) published on May 8: the consumer price index in Greece rose in April to 5.4% compared with April of last year, from only 3.9% in March, and a high since February 2023.
The main driver: the housing and utilities category jumped 13.8% (compared with 5.7% in March), against the background of the electricity tariff update that took effect in February 2026 and sharp rises in fuel and energy, natural gas: 39.5% in a single month; heating oil: 53.2% year over year; diesel: 32.4%. Transport prices rose 10%, food - 4.4%.
The figure comes against the background of an ongoing housing crisis. On May 12 Greek City Times published an analysis of European Union data: the average rent in Athens stands at 153% of the gross minimum wage, €920 a month, placing Greece as having the highest housing burden in the Union. Rents in the large cities rose about 8% year over year, faster than overall inflation. And at the same time, 2.3 million vacant apartments that do not reach the market.
From the writer's desk:
Implications for the investor: strong rental pressure supports rental yields, but also increases regulatory risks. High energy costs make holding older properties more expensive and widen the gap between renovated, energy-efficient properties and old ones.
2026: the world keeps choosing Greece
While some of Europe's classic tourist destinations deal with soaring prices and overcrowding, Greece continues to show exceptional growth figures - a trend with direct implications for the local real estate market and for the foreign investor.
According to Bank of Greece data, 2025 closed with about 38 million international visitors, an increase of 5.6% compared with 2024, and record revenues of 23.6 billion euros from tourism - a jump of 9.4%. This is the third consecutive year in which a record was set. An equally substantive figure is that revenues grew at nearly double the growth rate of arrivals, and average spending per trip rose 3.8% - an indication of a move to tourism of higher economic value, and not only quantitative growth.
The first 2026 data point to an acceleration of the trend. In January 2026 the number of arrivals rose 33% and tourism revenues 58% compared with January 2025. In the first quarter as a whole (January-March), more than 3.4 million tourists entered the country, an increase of about 38%, and revenues jumped 64% to about 1.7 billion euros - exceptional figures on the European landscape, and especially against the background of regional geopolitical tension in that period.
Athens - from a transit station to a sought-after destination
The most prominent growth was recorded in Athens. The city, once seen mainly as a stopover on the way to the islands, has become one of Europe's sought-after city-break destinations. Athens airport broke a historic record in 2025 with about 34 million passengers, an increase of 6.7% compared with 2024 and 33% above 2019 levels, a figure that places it first in Europe in the pace of recovery from COVID and second on the continent in air connectivity. The airport is now in an expansion plan worth 1.28 billion euros, intended to increase capacity to 40 million passengers by 2032.
A central characteristic of the growth is its timing. December 2025 recorded a jump of about 49% in arrivals compared with December 2024, evidence that Athens has become a year-round destination and not only in the summer months. For an investor in income-producing properties, the widening of the effective season is a substantive variable in the yield calculation.
Behind the tourism figures lies a gap directly relevant to real estate investors. The average hotel occupancy rate in Athens reached 77.1% in 2025, among the highest in Europe, above Madrid, Vienna, Berlin and Istanbul, with only London crossing the 80% mark. However, the average daily rate (ADR) stood at only 177 euros, ranking seventh out of 11 major European cities. In other words: Athens enjoys demand at a leading European level, but its prices are still significantly lower than those of Western European capitals.
This gap between high demand and relatively low pricing is exactly what attracts international capital. At the same time, a new supply of branded luxury hotels worth hundreds of millions of euros is entering the Athenian market, a move expected to pull up both rates and property values in the medium term.
The data indicate that the 2026 tourism season is expected to be the longest Greece has known. Airlines are expanding direct routes to Athens, demand for spring is advancing ahead of the usual schedules, and tourist traffic outside the summer months is breaking records. Greece is now establishing itself as one of the few countries in the Mediterranean combining steady growth, high international demand and renewed luxury positioning, a combination that directly affects property prices, the short-term rental market and yield potential.
Our media coverage
Anyone expecting a 20 cm concrete wall (the current standard) to stop a ballistic missile with a half-ton warhead in a direct hit is deluding himself. Such a solution requires building a military bunker, and that is simply not economical or possible in crowded Israel.
How a “property tax” on vacant land, which in the meantime has been split off from the Arrangements Law, at a rate of 1.5% of market value, could have turned historic land holdings into a “cash-flow bomb” for many families and changed the balance of power against developers.
The dollar at a 30-year low, a mortgage rate of 6.51% in the USA, and 2 million apartments on the shelf - I was interviewed by Lior Rosenfeld on Radio Tzafon 104.5, and we talked about the real question: is this the time to buy real estate in the USA, or a trap?
I was a guest on Yair Weinreb's program “The Color of Money” on Reshet Bet, and we talked about what everyone has been asking lately: is the European Airbnb over, and what does it mean for the prices of your upcoming vacation.
Romania
The central bank left the interest rate at 6.5% against the background of stagflation risks
On May 15, 2026 the National Bank of Romania (NBR) decided unanimously to leave the policy rate unchanged at 6.5%, its level since August 2024.
The decision comes at a delicate economic juncture: inflation accelerated in April to 10.71% (compared with 9.9% in March), while GDP fell in the first quarter of 2026 by 1.7% relative to the same period last year. Bloomberg characterized the combination as “stagflation risks” - monetary tightening required against the background of high inflation, at the same time as a shrinking economy.
Market consensus pushes the first rate cut to the second quarter of 2027 at the earliest.
Implications for investors: high local financing cost will remain a fixed factor at least until mid-2027. Deals relying on local bank leverage in Romania require a re-examination of the interest rate assumptions.
AFI's giant deal: six shopping centers in Romania for about €280 million
On May 25, MAS Real Estate (listed on the Johannesburg Stock Exchange) announced two separate, parallel transactions that together reach 403.8 million euros, and rearranged the retail real estate map in Central and Eastern Europe.
Six open-air shopping centers with a total leasable area of 125,000 sq.m. were sold to AFI Europe, controlled by the Israeli brothers Roni and Yehuda Naftali, for 281.8 million euros, which upon closing of the deal will take it to second place among owners of shopping centers in Romania, right after NEPI Rockcastle and ahead of Iulius Group.
The deal was carried out through IO Partners and Colliers, and is expected to close by June 30, 2026, subject to approval by the Romanian Competition Council.
A detail worth attention: the value of the properties in MAS's books stood at €311 million, meaning the sale was carried out at a discount of about €30 million below book value. MAS will receive in cash only €197.7 million, with the balance (€84.5 million) covered by bank loans taken by the eight companies holding the properties.
PNRR: Romania in a countdown to August 31
On June 1, 2026 an internal deadline that the caretaker government headed by Ilie Bolojan had set for itself passed: completing the round of contacts with the European Commission regarding the PNRR, Romania's recovery and resilience plan. But the real critical deadline is still ahead - August 31, 2026, the last date for submitting payment requests for the Union's grants. What is happening now in Bucharest is a race to execute.
The current picture took shape back in the summer of 2025. Out of an original envelope of about 28.5 billion euros, Romania will now be able to draw at most about 21.6 billion euros: grants (about 13.57 billion) and loans (about 8 billion). The difference, about 6.9 billion euros, was lost, entirely in the loans component, because the accompanying projects could not be completed by August 2026. The responsible minister Dragoș Pîslaru described this as fully preserving the grants while giving up part of the loans.
Who stays and who is out
Sections of the Moldova motorway (A7) and the Union motorway (A8), as well as the Cluj metro (about 300 million euros), were taken out of the PNRR, not for lack of importance, but because of problems in tender procedures and the lack of physical progress on the ground. At the same time, some sections of A7 (mainly between Focșani and Pașcani) were in fact moved to the grants component and secured, with an added budget. That is: the picture is mixed, and a large national project is no guarantee of European funding.
What the government is doing now
In recent weeks Bolojan summoned the heads of cities and counties for an inventory of more than 10,000 projects. The rule is simple: whatever can be finished by August 2026 stays under grant financing; whatever cannot is moved to the loan component or to alternative sources of financing. Lacking the authority to enact emergency orders, the government depends on fast parliamentary legislation to release more than 7.5 billion euros, with the aim of carrying out drawdowns in July-August.
From the writer's desk:
For an Israeli investor or developer operating in Romania, the practical meaning is twofold. First, a chapter of accelerated public cash flow - infrastructure, energy, health - is entering peak execution in the coming months, which affects contractor loads, labor availability and schedules. Second, and more important: this story is a reminder that in Romania, even guaranteed financing is not guaranteed until the project meets the schedule and proper procedure. The projects that fell did not fall for lack of money, but because of flawed tenders and delays. This is exactly the risk we check in every transaction: not only whether the financing exists, but whether the legal and procedural framework stands the test of time
Cyprus
2025 brought a real estate boom of €6.5 billion, and a rental market that broke
According to Cyprus Mail, Cyprus's numbers for 2025 look excellent on paper: €6.5 billion in real estate transactions, 25,600 transactions, building permits that rose 9% in number and 28% in value. A historic record.
And then you look at the rental market, and realize that something doesn't add up.
According to an annual analysis by Cyprus's government Department of Lands and Surveys (September 2024 - September 2025): rent for a 3-room apartment in Nicosia jumped from €950 to €1,300 in a single year - a rise of 37%. A one-room apartment in the Engomi neighborhood went from €625 to €725. In Limassol the vacancy rates stand at 2%-4%, and a reasonably priced apartment disappears from the market in under three weeks.
The problem is structural, not quantitative
Cyprus does not suffer from a shortage of construction. It suffers from a shortage of the right kind of construction. Almost all the apartments built were sold, to independent buyers or to small Buy-to-Let investors, and none of them entered a long-term institutional rental pool.
Eurostat data over 14 years (2010-2024) sharpen the picture: across the European Union housing prices rose 55.4% and rents 26.7%. Cyprus went in the opposite direction, sale prices remained almost stable over 14 years (Cyprus and Italy are the only two countries in the Union that did not record a rise), while rent kept climbing: +4.5% in 2023, +4.6% in 2024. Two markets that stopped talking to each other.
Build-to-Rent: the solution that has not yet been tried
The share of renters in Cyprus rose from 27.1% in 2014 to 30.6% in 2024 - a real structural change. In Germany, by comparison, 52.8% of households rent, and the Build-to-Rent model, in which institutions build solely for long-term rental, is an integral part of the market. In Cyprus, this model barely exists.
As for the investment market: the real estate sector makes up about 16% of Cyprus's gross national product and grew 6.9% in the past year. The question heading into 2026 is not whether it will continue to grow, but whether some of the money will finally flow to properties intended for those who live and work on the island.
Housing prices continue to rise - the sales market records a five-year high
First quarter 2026 data point to a continuation of the price-rise trend in the Cypriot real estate market. According to the RICS/KPMG Cyprus property index, published on June 1, apartment prices rose 4.09% in Q1/2026 compared with prices in the corresponding quarter of 2025, and house prices 3.60%. Rents rose at a faster pace, 5.10% for apartments and 3.03% for offices, which preserves the viability of investment even in an environment of higher purchase prices.
According to the report, real estate yields remained stable overall, with minor declines on the order of only 0.01%-0.09%, which indicates that the growth in prices is accompanied by parallel growth in rental income.
On the sales side, data from the land registry department for May 2026 show 1,723 sale contracts - an increase of 5% compared with May last year. A look at the rolling annual figure (January-May) reveals a stronger picture: 8,043 transactions, growth of 12% compared with the same period in 2025.
The trend is not geographically uniform. Paphos recorded the sharpest growth, 24% in transaction volume compared with last May, and Larnaca 14%. Limassol, the largest market on the island, grew 2%. By contrast, Nicosia fell 12%.
According to RICS estimates, the main cause for concern is not the current state of the market, but the possible implications of the Middle East war for energy costs and for the tourism sector, two critical engines for Cypriot real estate. According to RICS's chief economist, “as long as geopolitics persists, the risk that will be reflected in the market data is growing.”
Portugal
Commercial real estate investment Q1 2026 - €915 million, a high of 130% above the three-year average
Commercial real estate investment in Portugal reached €915 million in Q1 2026, an increase of about 39% compared with Q1 2025 and 130% above the first-quarter average of the last three years, according to Savills and CBRE data.
The volume was driven by two dominant transactions: the purchase of the Arrábida and Gaia shopping centers for €180 million, and the sale of the Penha Longa Resort to the fund L Catterton and Cedar Capital Partners for €120-140 million. The hospitality sector and the retail sector led the investments, at 39% and 37% of total volume respectively. Institutional investors and private equity funds together make up 64% of the investment volume.
By contrast, the residential market shows signs of cooling: residential transactions fell 9.4% in the quarter, while the national median price rose to €2,198/sq.m. (+17.5% YoY as of Q4 2025). Properties priced below €300,000 fell from 32.3% to 27.6% of total supply. Foreign demand fell about 15%-20% from the 2022-2023 peak, the effect of abolishing the real estate route of the Golden Visa (October 2023) and closing the NHR regime to new registrants.
Stable prime yields: offices 5.00%, logistics 5.75%, hospitality 5.50%.
From the writer's desk:
The Portuguese market in 2026 requires more precise planning than before from the Israeli investor:
- The value of “seniority”: if you have a property with an active AL license in Lisbon or Porto - do not sell. Thanks to the abolition of the license expiry every 5 years, your property has become a cash-generating machine with an enormous barrier to entry for new competitors.
- The new road map: for those looking for a new short-term purchase (Airbnb), the focus shifts to second-tier cities (such as Coimbra, Aveiro or towns on the Silver Coast) that are defined as “low-density” areas. There one can obtain a perpetual license, transfer it on sale, and enjoy the abolition of the 15% CEAL tax.
- Hedging risk through long-term rental: for Israelis seeking peace of mind, the 10% tax track on long-term rental in the big cities offers a net yield that competes with Airbnb (because of the lower management costs), with full regulatory protection.
Bottom line: Portugal in 2026 is a market for the well-informed. The big winners are those who already hold properties in the big cities, and those who will know to buy in the developing periphery under the new licensing rules.
The Bank of Portugal publishes its financial stability report - foreigners at 28% of the market, and a warning of a price correction
The Bank of Portugal published at the end of May its semi-annual financial stability report, and the figure that grabbed the headlines directly concerns our audience: foreign buyers made up 28% of all apartment purchases in the country in 2025. It is important to be precise: the figure combines two different groups: both foreigners who are residents of Portugal and buyers who are not residents at all. The leading countries of origin are Brazil, Angola and France.
Anyone who looks at the number as a “new foreign wave” is mistaken. The share of foreign buyers has been structurally stable for five years - 25% in 2019, a peak of 31% in 2023, and now 28%. This is not an unusual jump but a high, stable level. One point does stand out: the value of the foreign buyers' transactions is higher than average. That is, foreigners are not only 28% of the quantity - they are an even larger share of the market's total monetary value. This is the audience that buys at higher prices.
But the part that deserves real attention is the tone of the central bank. The report states that the risks to financial stability are growing, mainly against the background of geopolitical tensions and the possibility of a sudden correction in the financial markets. And in an unusual and explicit way, the bank points to a “risk of a sharp and unexpected fall in housing prices.” When the central bank itself, not a commentator, not a market competitor, puts this scenario in writing, it is a signal that should be read seriously.
Alongside this, the report presents two balancing messages: the Portuguese banking system has proven strength and resilience, but is required to maintain cautious risk management. And for the first time the report also highlights physical climate risk; following an extreme climate shock that hit the central region of the country in early 2026, the bank warns of an impact on the value of collateral (the real estate used as security for loans).
From the writer's desk:
What does this mean for the Israeli investor? The picture is twofold. On the one hand, the Portuguese market is still open, foreigner-friendly, and embodies a stable and strong foreign share, there is no sign of investors fleeing. On the other hand, three risk factors are now accumulating simultaneously: a price-correction warning from the central bank, the new purchase tax (IMT) aimed at non-residents, and exposure to climate risks in certain areas. The practical conclusion is not “avoid” but “price correctly”: anyone entering a transaction in Portugal now needs to build their economic calculation on current value and an updated tax scenario, and not on an assumption of continued price rises.
USA
A new Fed chair, interest that does not fall: what the appointment of Kevin Warsh means for real estate investors
The US Senate confirmed on May 13, 2026 Kevin Warsh as the new Chair of the Federal Reserve, by a vote of 54 to 45, the most divided vote in the history of a Fed chair appointment. Warsh, 56, a former economist at the investment bank Morgan Stanley and a member of the Fed's Board of Governors between 2006 and 2011, began his term on May 15, 2026, with the expiry of Jerome Powell's term.
The interest rate situation as of today
The Federal Reserve interest rate remained at 3.50%-3.75% at the latest FOMC meeting (April 28-29, 2026). The 30-year mortgage rate rose on May 21, 2026 to 6.51%, compared with 6.36% the previous week, a rise of 15 basis points within a week. Mortgage applications for purchase fell 4.1% in the same week.
Market forecasts: zero cuts in 2026
Less than 3% of trading in the interest rate derivatives market (CME FedWatch) prices in any rate cut at any of the remaining FOMC meetings of 2026. The reason: inflation stands at 3.8%, almost double the Fed's 2% target, combined with uncertainty stemming from tariff policy and energy prices.
Warsh's policy: skepticism about quick easing
Although his appointment is publicly perceived as a continuation of Trump's pressure on the Fed to lower interest rates, Warsh's actual positioning is more complex. In his previous term he left the Board of Governors in 2011 because of disagreement with Bernanke's QE policy. His declared position: the Fed should narrow itself to anti-inflation, talk less and intervene less. The first FOMC meeting under his chairmanship is set for June 16-17, 2026.
One factor being examined in the market: the possibility that Warsh will choose quantitative easing (QE - bond purchases) as a tool to stimulate the economy, instead of lowering interest rates. If this forecast materializes, the implication for real estate will be the opposite of what is expected - a rise in property prices against the background of high liquidity, without any easing of financing costs.
From the writer's desk:
Investors and developers examining transactions in the American market are required to test the viability of the deal on the basis of an interest rate of 6.5% and above as a baseline assumption, and not to rely on a scenario of rate cuts within 2026. It is also advisable to re-examine any existing rate lock on transactions in progress and the cap rate that underlay a feasibility analysis conducted a few months ago.
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