Supply vs. Demand: Jerusalem's Real Estate Dilemma
For a while now, there has been very high demand and very low supply for apartments in Jerusalem. Specifically, for apartments that are 100+ sqm with a sukkah balcony or outdoor space, storage room, parking, and an elevator in the building, in the neighborhoods of Baka, the German Colony, and the main Anglo areas.
Highly Competitive Market
What is the cause for such high demand and low supply? In recent years, more and more families have been making Aliyah or purchasing a home in Jerusalem to have for the holidays or vacations. Many foreign clients have the same needs: a spacious apartment with a sukkah balcony, storage room, parking, and an elevator in the building.
As we know, Israel is a small country, and though it is constantly under construction (many joke that the national bird is the crane), apartments cannot be renovated or built quickly enough to fill the high volumes of demand coming at a time. Clients are now starting to understand why they are only being shown 2-3 units at a time, if that. Just imagine that there are probably 10 other people also looking for exactly the same apartment that you are, and will be seeing the same exact units that you’ll be seeing. Because of this, you'll either need to move quickly with the sale, or compromise on some of the features you are looking for.
Compromise is Key
Given the current high demand and low supply situation, it is important to stay positive yet realistic about the options that exist to you. It is extremely beneficial to go into your home search knowing which features you are looking for that are negotiable, and which are not. If you are able to compromise on some aspects, you immediately gain access to more apartments available on the market.
Here are some ways of compromising by broadening your search requirements and opening yourselves up to more supply in the market:
Exploring Different Neighborhoods
Jerusalem is very walkable. If you have your heart set on finding a home in Baka or the German Colony, but you’ve been searching for 6-12 months without any luck, then you might consider surrounding neighborhoods like Katamon and Mekor Chaim. Prices in these two neighborhoods are generally 10+% cheaper, with similar features that you are looking for, and just a few minutes extra of a walk away.
Purchasing an Off-Plan Unit
If you don’t need a place immediately and can wait a few years, this is a great option for you. Off-plan apartments will be brand new, with all of the amenities you desire as well as the latest and greatest technological specifications. A major advantage to buying off-plan is that you have access to great pre-sale prices and payment terms, and you have the ability to choose your own design materials and finishes. It is important to note that purchasing a unit off-plan requires a team of experts (for each specific project you must meet with a real estate lawyer to get advice) to help you navigate the process smoothly.
Purchasing in a Brand New Project
If you want a brand new apartment in a beautiful building, with all of the amenities on your checklist, in just a few months’ time, then purchasing in a brand new project is for you. You won’t get a say in the design materials and selection of finishes as the apartment will have already been built, but you will get a brand new apartment to make your own. One factor to consider here is why these units are still remaining; sometimes it can be a bit of luck, or sometimes the remaining units might not be the best units. Brand new projects are going up all over the city!
Purchasing in a Tama 38 Project
One kind of Tama 38 is the complete refurbishment of an existing building including an addition of 2 floors with brand new apartments. Tama 38 projects are a great option for someone looking to purchase an apartment in the area of their choice, or with some (if not all) of the amenities they desire, but are able to wait a few months to a year. Tama 38 projects generally offer competitive prices compared to brand new projects (could well be 15-20% cheaper).
These are some great ways to open yourselves up to seeing more units and finding the home of your dreams. Have a look at our website to see luxury units for sale, as well as brand new and TAMA 38 projects that are available.