Jerusalem Real Estate: Standing Apart in a Shifting Market
As I regularly do, I’ve been reviewing recent articles on the current state of Israel’s real estate market. Several have been particularly insightful, but one stood out for its clear and data-driven look at the trends shaping the market today—and that is the focus of this blog.
Source: The Marker, December 15, 2025
Jerusalem vs. the Rest of Israel
The data clearly shows that Jerusalem continues to stand apart from the national housing trend. While average apartment prices across Israel have declined in recent measurements, prices in Jerusalem have continued to rise.
In Tel Aviv, prices have softened modestly, particularly in the non-luxury segment. Across the broader Tel Aviv district, prices declined by approximately 1.1%, and since the beginning of the year, prices have fallen by more than 10% in cities such as Bat Yam, Givatayim, Herzliya, Ramat Hasharon, Bnei Brak, and Ramat Gan.
At the district level, these declines are even more pronounced. Prices in the Northern District fell by approximately 5.5%, reflecting a broader national slowdown in housing demand. Jerusalem, however, is the clear exception. Between September and October 2025 alone, apartment prices in Jerusalem rose by approximately 1.4%, and overall, prices in the Jerusalem district increased by about 1.7%, following a sharp 8.9% annual rise the previous year.
What the Statistics Don’t Show
Importantly, headline statistics do not fully capture what is happening in Jerusalem’s most sought-after neighborhoods. In prime areas such as the City Center, Rehavia, Talbiya, the German Colony, and surrounding neighborhoods, prices are rising at a significantly faster pace than the district average.
From a non-statistical, on-the-ground perspective—based on transactions I’ve been directly involved in—I would estimate price increases of approximately 15–20% over the past year in these prime locations.
What’s Driving Demand?
Several factors are fueling this continued growth. One of the most significant is increased demand from Anglo buyers, many of whom are seeking both strong investment opportunities and long-term security in a city that is historically, culturally, and strategically significant.
This demand is being further reinforced by global geopolitical uncertainty. Tragic events abroad, such as the recent terrorist attack in Bondi, have heightened awareness within Jewish communities worldwide and are prompting many to reassess where they invest their capital—or consider establishing a deeper foothold in Israel.
Supply Constraints in Prime Neighborhoods
While the article addresses rising demand, it does not fully emphasize one of the most important forces driving price growth: limited supply.
In Jerusalem’s prime neighborhoods, available inventory remains extremely scarce. New construction is constrained, planning timelines are lengthy, and quality apartments are few. As demand continues to exceed supply—particularly in the most desirable locations—price increases become a natural outcome, especially in areas where availability is already tight.
This imbalance is creating price movements that are often sharper than what headline statistics alone reflect.
Final Thoughts
Strong demand from both local and international buyers, combined with a very limited supply of quality properties in Jerusalem’s prime neighborhoods, continues to drive meaningful price growth.
For buyers considering entering the market, this environment presents a clear opportunity. While broader national trends may fluctuate, Jerusalem—particularly its most desirable areas—has once again demonstrated its resilience and long-term appeal. For those who are thoughtful, informed, and ready to act, there are still excellent opportunities to secure property in a market that has consistently proven its strength over time.
Disclaimer: This article is not data-based but rather based on Ben Levene's personal market experience and opinions. No decisions should be made without thorough due diligence and professional financial advice.
Ben Levene, CEO of CapitIL Real Estate, brings over 15 years of expertise in the Jerusalem real estate market. For inquiries, reach out to him at [email protected].