Baku or Israel — Where Is Investing More Worthwhile Right Now? | Merkaz HaNechasim

Short answer: The right question usually isn't "which is more worthwhile" but "how does combining the two spread risk." The entry cost for real estate in Baku is significantly lower than that required in Israel, which makes it an accessible way to start diversifying a real estate investment portfolio, alongside — not instead of — properties in Israel.

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Frequently Asked Questions

What's the main difference in entry cost?

Housing prices in Baku are significantly lower than comparable housing prices in Israel, which allows an Israeli investor to initiate an investment with an amount that's very difficult to obtain a similar property with in Israel.

Is the pace of price growth in Baku higher?

ABB Bank 2024 data shows a significant increase (14%-15% year-over-year) in Baku, but this is a specific period in a market that's still relatively young — you can't conclude from it that the trend will consistently remain higher than Israel's over time.

What's the additional risk that exists in Baku and not in Israel?

Currency risk (AZN versus shekel/dollar), legal-regulatory differences, physical distance from the property, and dependence on relatively new projects — all risks that don't exist (or exist to a lesser degree) in an investment in Israel.

Why consider diversifying into Baku anyway?

Geographic diversification is a basic principle of risk management in any investment portfolio — not putting all capital in the same market, the same currency, and the same country. Baku offers an accessible entry point for such diversification, not a replacement for investing in Israel.

What's the most important consideration before making a decision?

Examine your entire existing investment portfolio and ask where balance is lacking — not choosing between the countries out of competition, but asking "does adding international exposure improve my overall diversification" and acting accordingly.

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