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Yes, the analysis of Jerusalem's property market is included in our pack
Thinking about buying a 3-bedroom apartment in the Altstadt district of Salzburg? It’s a charming area, but you're probably wondering: is now the right time to buy, or should you wait for prices to drop?
And what about long-term investment—should you look into other neighborhoods like Maxglan or Lehen where property values might appreciate more over time?
In this article, we’ll answer these questions. We know this market quite well - and we have put all our knowledge in the Austria Property Pack.
Will property prices increase in Jerusalem in 2025?
Yes, property prices in Jerusalem are expected to rise in 2025, driven by a combination of high demand and limited supply of housing.
Backed by our fresh, in-depth market analysis, we’re confident that Jerusalem remains a highly attractive city for both domestic and international investors.
While there are some economic challenges like inflation and geopolitical tensions, the main drivers behind Jerusalem’s price growth remain strong.
Demand, especially in central and historic areas, continues to outpace supply, making significant price declines unlikely. Additionally, Jerusalem's cultural and religious significance continues to attract buyers from around the world.
Signals pointing to a property price increase in Jerusalem
Here are some factors suggesting prices could increase:
The ongoing shortage of available land for new construction in Jerusalem is expected to persist, limiting the supply of new housing and driving up prices as demand remains steady.
Jerusalem's status as a cultural and religious hub continues to attract international buyers, particularly from the Jewish diaspora, who are interested in owning property in the city, thereby increasing demand.
Government initiatives aimed at improving infrastructure and public transportation in Jerusalem are expected to enhance the city's appeal, potentially increasing property values in areas benefiting from these improvements.
The trend of urbanization and population growth in Jerusalem is expected to continue, leading to increased demand for housing in the city.
The limited availability of rental properties in Jerusalem is pushing more people towards purchasing homes, thereby increasing demand and driving up prices.
Jerusalem's unique historical and cultural significance makes it a desirable location for both local and international investors, sustaining high demand for property.
The city's educational and healthcare institutions continue to attract students and professionals, further increasing demand for housing in Jerusalem.
Signals pointing to a property price decrease in Jerusalem
Here are some factors suggesting prices could fall:
Geopolitical tensions in the region could impact investor confidence and reduce demand for property in Jerusalem.
Economic challenges, such as rising inflation and cost of living, could limit the purchasing power of potential buyers, particularly among middle-income families.
Potential increases in interest rates could make mortgage financing more expensive, reducing the affordability of homes for many buyers and potentially cooling demand.
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If property prices go up in Jerusalem, how much would they increase by?
If real estate prices in Jerusalem were to rise in 2025, the increase would likely be around 3% to 7% of their 2024 values.
Typically, real estate in dynamic markets like Jerusalem appreciates by approximately 3% to 7% annually over the long term. However, fluctuations can occur depending on factors such as neighborhood, demand, and property type.
It means that, if you spot a charming 2-bedroom apartment in Rehavia for 3,000,000 shekels today, don't be surprised if it's priced between 3,090,000 and 3,210,000 shekels this time next year.
To give you a better understanding, here is a table that shows 7 types of Jerusalem real estate properties, their estimated prices in 2024, and projections for 2025 based on potential price increases of 3%, 5%, and 7%.
| Type of Property | Average Price in 2024 (₪) | Price in 2025 (3% increase) | Price in 2025 (5% increase) | Price in 2025 (7% increase) |
|---|---|---|---|---|
| Historic Apartment (60 sqm / 646 sqft) | ₪2,500,000 | ₪2,575,000 | ₪2,625,000 | ₪2,675,000 |
| Modern Apartment (75 sqm / 807 sqft) | ₪3,200,000 | ₪3,296,000 | ₪3,360,000 | ₪3,424,000 |
| Luxury Penthouse (100 sqm / 1,076 sqft) | ₪6,000,000 | ₪6,180,000 | ₪6,300,000 | ₪6,420,000 |
| Studio (30 sqm / 323 sqft) | ₪1,200,000 | ₪1,236,000 | ₪1,260,000 | ₪1,284,000 |
| Loft (80 sqm / 861 sqft) | ₪4,000,000 | ₪4,120,000 | ₪4,200,000 | ₪4,280,000 |
| Townhouse (150 sqm / 1,615 sqft) | ₪8,000,000 | ₪8,240,000 | ₪8,400,000 | ₪8,560,000 |
| Investment Property (50 sqm / 538 sqft) | ₪2,000,000 | ₪2,060,000 | ₪2,100,000 | ₪2,140,000 |
Everything you need to know is included in our Property Pack for Jerusalem
If real estate prices go up in Jerusalem, which areas are likely to see the biggest increases?
Today, people who want to move to Jerusalem seek its historical charm, but they also desire modern conveniences and vibrant social scenes, which German Colony delivers. Hence, we could see a price increase there in 2025.
Also, lately, there's been a shift toward more youthful, vibrant neighborhoods, and Mahane Yehuda has really taken off.
We like it when information is clear and easy to digest. So, here’s a table that highlights the areas where prices might rise the most, along with the reasons behind those expected increases. It’s very high-level. If you want more details on a specific area, please check our real estate pack tailored to the Jerusalem market.
| Neighborhood | Level of Increase | Why |
|---|---|---|
| German Colony | High | Recent development of luxury housing projects and its increasing appeal to international buyers as travel normalizes post-pandemic, driving demand. |
| Rehavia | High | Expected rise due to limited housing stock, upcoming renovations to heritage buildings, and growing demand for prime properties in central Jerusalem. |
| Talpiot | Medium-High | Ongoing gentrification and new transport links, along with several planned redevelopment projects in the area, are likely to push prices higher. |
| Har Hotzvim | Medium | The shift towards hybrid workspaces is driving demand for residential properties near business districts, combined with new mixed-use developments. |
| Katamon | Medium-High | Eco-friendly urban projects and recent construction of new schools and parks are increasing its attractiveness for families, pushing prices upward. |
| Nachlaot | Medium | Investment in local infrastructure, such as the extension of tram lines and renovation of historic areas, is boosting long-term value. |
| Mahane Yehuda | High | Upcoming large-scale urban regeneration projects and improved public transport access are expected to make this area more desirable. |
| Pisgat Ze'ev | Medium-High | Its proximity to central Jerusalem, along with new office and residential developments, makes it increasingly attractive to professionals seeking more space. |
| French Hill | Medium | Gentrification and cultural regeneration projects are attracting new residents, leading to rising prices as the area becomes more fashionable. |
| Mamilla | High | As new luxury developments are launched, demand for premium housing among wealthy buyers is expected to further increase property values. |
| Old City | High | Upcoming restoration projects and high-profile cultural initiatives are driving a renewed focus on this central, historic location. |
-The best areas to buy a property in Jerusalem
If I'm looking to invest in real estate, what types of properties should I focus on for the best value appreciation in Jerusalem?
In 2025, Jerusalem real estate trends focus on tech-smart, energy-efficient apartments, larger suburban homes for families, properties with outdoor spaces, and eco-friendly buildings—all driving higher demand and prices. Here is a summary.
- Tech-Equipped and Energy-Efficient Apartments:
Driven by remote work and sustainability trends, these homes offer smart technology features and energy-saving systems. They cater to young professionals and tech workers, making them a hot commodity in 2025.
- Family-Sized Apartments in Suburban Areas:
With a growing demand for larger living spaces, especially among families, suburban areas near Jerusalem are seeing increased interest. Proximity to green spaces, schools, and cultural sites is a major factor driving value.
- Properties with Outdoor Spaces:
Post-pandemic, outdoor spaces like terraces, balconies, or gardens have become highly desirable. In a city with a rich historical landscape like Jerusalem, these features offer a much-needed escape and are likely to drive up property values.
- Eco-Friendly Buildings with Low Carbon Footprints:
Jerusalem's commitment to sustainability is boosting demand for eco-certified buildings. Buyers are increasingly valuing properties that align with the city’s green goals, leading to price appreciation in this category.
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