Jerusalem — So you think Upper West Side apartment prices
are crazy expensive?
As the intifada has quieted down,
with the high-tech sector on the rebound, and with
anti-Semitism in France fueling second-home purchases, real
estate prices in Jerusalem — the poorest large city in Israel
— are skyrocketing.
Take this no-frills three-bedroom
apartment located in the gated community called the Italian
Colony, a three-minute walk to the heart of the trendy Germany
Colony: It’s going for a whopping $535,000, a price an Israeli
real estate agent called a deal. Which may not seem like much
to the average Upper West Sider but given salaries in Israel,
it’s a relative fortune.
“The price of luxury
apartments in Jerusalem has jumped more than 20 percent since
the summer,” said Gilad Dayan, a young, energetic agent at
Tafnit Real Estate who walked briskly through the apartment,
taking in the small kitchen, non-descript living room and
pointing out the basement, patio and private garden. “This one
is the least expensive in the complex because the owners want
to sell it quickly,” Dayan said.
the Germany Colony, Old Katamon and Baka are all in great
demand, especially when it comes to Jews in France and the
U.S,” Dayan said of the “hot” neighborhoods in the center and
southern part of the city. “Something has definitely changed
for the better.”
That “something” is actually a
convergence of several factors, according to Bernard Raskin,
the owner of Re/Max Israel, the largest real estate company in
the country. “There’s been an upturn since December 2003,”
Raskin said, speaking by phone from his Tel Aviv office.
“First, you need to remember that the improvement
comes in the wake of years of declining prices and volume,
when developers and builders weren’t ready to take the risk,
and when consumers were delaying their buying decisions
thinking prices would continue to fall.”
Raskin said, there was not enough supply to meet the demand
and prices began to rise. Raskin also credited the influx of
foreign buyers, especially from France, where anti-Semitism
has been growing, for pushing up prices.
Jewish community is very committed to Israel and the North
African community is especially Zionistic,” Raskin said.
“This, coupled with the growing anti-Semitism in Europe in the
past four years, has spurred them to buy second homes here.”
The French tend to favor such coastal cities as Tel
Aviv, Netanya, Herzilya, Bat Yam, Ashdod and Ashkelon, and of
course Jerusalem, Raskin said. The fact that the euro is so
strong “gives the Europeans an advantage” over Israelis and
other buyers, he noted.
The real estate agent said he
was “initially surprised” by the large number of American Jews
who have purchased Israeli homes in the past 12 months “since
for them it’s not an issue of anti-Semitism. My feeling is
that they are simply Jews who are aware, through their
children living here and the Jewish newspapers, that prices
Joey Silver, an American-born
Jerusalemite who just purchased a 3,500-square-foot house in
the ultra-fancy neighborhood of Yemin Moshe, said he decided
to buy a home following his mother’s death four months ago.
“It’s a good time to buy,” Silver says, adding that “six
months ago would have been even better. But as it is, I feel I
got a bargain.”
Though he declines to specify how much
he paid for the property, which once belonged a Baroness Alex
de Rothschild, Silver does admit that it was considerably more
than $1 million. “Prices are starting to rise very seriously.
In the past six months, as European anti-Semitism has
increased, more English and German and French Jews are buying
in Israel,” Silver says. But he issued a let-the-buyer-beware
warning: “Not every property is a gold mine.”
Israel’s Raskin stressed that the weak dollar has not deterred
Americans from buying in Israel because the prices of
second-hand Israeli apartments are quoted in dollars, not
shekels. That is not the case for brand-new apartments. Other
factors contributing to the real estate boom are the
improvement in Israel’s economy, which grew about 4 percent
last year, and the peace process.
rebounding, meaning there is more money available,” Raskin
said, adding that Israeli interest rates are at an all-time
low. This, coupled with the recent decrease in terror attacks
“has made the market quite buoyant.”
Shelly Levine, a
real-estate project manager and agent who has initiated large,
successful building projects in Modi’in and Ramat Beit
Shemesh, both between Jerusalem and Tel Aviv, as well as
Ma’aleh Adumim in the West Bank, has also detected a
“significant upturn” during the past year.
other developers, “we did OK” during the intifada, Levine said
of her projects, which she actively markets to diaspora Jews
as well as Israelis. Now, however, “we’re receiving five, six
times the amount of e-mails and we’re making sales all over
Levine said that prices in the Buchman
neighbood of Modi’in, where her company has completed, and
sold, 85 units, with another 155 under construction, have
risen about $30,000 in the past year. There, a cottage with
4.5 bedrooms costs under $300,000, the same as a two- to
three-bedroom fixer-upper in the better parts of Jerusalem.
“People have come to the conclusion that not everyone
can live in Rehavia or Baka, where properties have gone up
tens of thousands of dollars in the past year,” Levine said.
While Levine said she prides herself on developing
properties that middle-class Israelis can afford, she does
have one “glam” project up her sleeve. Within the year she
hopes to break ground on a top-of-the-line complex in the
heart of downtown Jerusalem, near Nevi’im Street. The price of
a two-bedroom apartment in the complex, which will boast a
swimming pool and spa, will likely be in the $500,000 range.
“The hope is that we can revitalize downtown
Jerusalem,” Levine said, referring to center’s pitiful decline
during the intifada, when hundreds of restaurants and shops
were forced to shut down because of lack of business.
While real estate agents and potential sellers are
clearly excited by the upswing in the real estate market, the
recovery is bad news for potential buyers.
revival, no question about it,” said Ruby Ray Karzen, an
interior designer who also manages renovation projects. “The
problem is that many neighborhoods in Jerusalem are so
expensive that the average person can’t afford to live here.
The young people like my grandchildren are being forced to
move out of the city.”
Karzen mentions Sha’are Tzedek,
a formerly run-down neighborhood of tumble-down little hovels
next to beautiful, tree-lined Rehavia, as an example of
gentrification. “People are taking out shacks and putting up
beautiful apartments so fast it makes you dizzy,” Karzen said
with concern in her voice.
While it is true that
certain Jerusalem neighborhoods are becoming prohibitively
expensive, Gilad Dayan believes that it’s still possible to
find an affordable home in the neighborhoods bordering the
more popular ones. In fact some neighborhoods have yet to
witness any increase at all.
“In neighborhoods other
than the really hot ones, prices have increased about 10
percent since the summer,” Dayan said, his cell phone chirping
incessantly. “There are still bargains to be found, assuming
you act quickly.” n