Home prices in Jerusalem rose 12% in 2010 to an average of NIS 1.42 million, compared with the nationwide average of NIS 1 million, according to BDO Ziv Haft, and it expects no improvement. Home sales in the city fell to 1,362 in 2010 from 1,426 in 2009.
On Jerusalem Day, home prices in the capital are high and the supply is low, driving residents out of the city altogether. 19,900 residents, mostly young couples, left the city in 2009, according to the Central Bureau of Statistics, as the flight from the city continues.
Eldar Projects Management Jerusalem bureau chief Shai Cohen says, "Everything begins with the high and unrealistic price of land for residential lots in the city, which has an immediate effect on the final price of apartments, which are not affordable by young couples or families seeking better homes. For example, and Israel Land Administration tender in the Ir Ganim neighborhood - a distressed neighborhood - was one at a price of NIS 1 million per land per apartment."
Shai adds that so-called affordable four-room apartments in Jerusalem cost NIS 1.4 million, and that the average price of a four-room apartment in the city is over NIS 2 million.
Land assessor Erez Cohen says, "A situation has resulted in Jerusalem that even projects not necessarily targeting foreign residents or are classified as luxury projects have affectively become such, because of the high prices in the city center. The result is resident flight to homes in Jerusalem's environs."
Published by Globes [online], Israel business news - www.globes-online.com - on June 1, 2011
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