Looking for a small investment property in the heart of the city? That search will prove increasingly more difficult starting this month.
The betterment tax exemption which has already been extended from March is now over. The exemption was for the most part a feeble attempt by the state of Israel to lower prices on investment properties. Betterment tax is a tax on capital gained from selling real estate.
Often I am asked whether this is a buyer’s or a seller’s market? My answer usually depends on whether or not the person asking me is interested in buying or selling.
Beyond my personal interests as a real estate agent, the answer really is both. The market in central Jerusalem thus far has been fairly unpredictable. Compared to the years of buyers grabbing virtually every apartment for sale, now there seem to be numerous apartments that are just sitting on the market for long periods of time. Many buyers used to complain that there aren’t any apartments for sale. Now that there are apartments on the market buyers complain there are no “good” apartments for sale. Well, what is a “good” apartment? According to the vast majority of buyers today, a good apartment is one with ‘few to no steps, spacious, a Succah balcony or garden, a nice building, parking, and of course a “metziah” or at least a “fair price”.
“What is Church land?” I am constantly asked this question by Israeli and foreign buyers alike when telling them about a beautiful, often expensive, property in the most prestigious neighborhoods in Jerusalem. Many of those who have heard of Church land proclaim “ no Church land!” when listing their criteria for buying an apartment in Jerusalem. Which brings us back to the question – What is Church land?
Church land refers to property on land owned by a number of various Churches who have a physical presence in Israel. These Churches began purchasing land in Israel as early as 100-200 A.D. It is said that sixty percent of Church land in Israel is owned by the Greek Orthodox Church (which interestingly enough only makes up about eight percent of the Christian population in the world).
I often get the call “hey, I saw your sign on ____ and wanted some information.” After giving this prospective buyer all the reasons why this property is a perfect vacation getaway in the heart of Jerusalem, I get a response that forces me to change my strategy instantly.
The response: “I’m looking more for a good investment opportunity”.
Investing in real estate is certainly not a new phenomenon. There have been landlords since the time people actually owned property. It’s very simple: people will always need a place to live and there will always be people who prefer to rent. This is especially true in the very dynamic central Jerusalem real estate market. The central Jerusalem neighborhoods have an especially large rental population that includes students, foreign officials, clergymen, and more.
The real estate market in Israel, particularly in Jerusalem, has steadily increased for quite some time. In fact from the year 2008 until the middle of 2011 prices skyrocketed to almost 49%. The beginning of 2011 seemed to be a continuation of this trend. Prices continued to climb, local and foreign investors continued to invest, and foreign buyers continued to purchase vacation homes.
In the summer of 2011 there seemed to be a revolution in Israeli real estate. Suddenly the Israeli public decided to take to the streets and demonstrate against the high real estate prices. This certainly led to a reduction not in prices per say, but in the amount of transactions. Transactions decreased to 30% by the end of 2011. Ultimately prices rose in 2011 due partially to the high prices of land.
The Jerusalem Real Estate market is fast paced and exciting. Jerusalem, in many circles, is known as the real estate capital of Israel because of the relatively high volume of sales and its attraction to buyers from all over the world.
Jerusalem is made up of over 130 different neighborhoods. Those neighborhoods closest to the City Center and the Old City, are the ones most attractive to foreign buyers and therefore considerably more expensive.