According to real estate professionals, more foreign residents have been buying homes in Jerusalem since Covid. The war and rising antisemitism around the world have only increased this trend. Many buyers are looking for a place they can move to if needed, and Jerusalem holds deep emotional and religious meaning for them. Popular neighborhoods include Rehavia, Talbiya, Baka, Katamon, the German Colony, Ramat Eshkol, and French Hill.

The numbers support this. In recent months, about half of all foreign home purchases in Israel were in Jerusalem and nearby areas, even though nationwide foreign buyers make up a much smaller share of the market. Jerusalem is also the only region in Israel that has seen steady price increases over the past several months.

Another major factor is limited supply. Jerusalem has very little available land, especially in the neighborhoods foreign buyers prefer. Even though construction has increased, it is still not enough to meet demand, particularly in the luxury market. Homes close to major sites like the Western Wall, synagogues, and established communities are especially hard to find, which pushes prices higher.

Urban renewal is also playing a role. Older neighborhoods are being rebuilt with new, modern apartments, light rail access, and better infrastructure. This is raising property values and attracting both investors and families. Some foreign buyers are purchasing older apartments specifically because they know they will benefit from future renewal projects.

Experts believe prices in Jerusalem will continue to rise in 2026, but at a slower pace than before. More homes are expected to come onto the market, which may ease pressure slightly. Still, demand remains strong, and Jerusalem’s unique mix of history, community, and limited space means prices are unlikely to fall anytime soon.

Based on Globes article  “Jerusalem home price rises buck national trend”
https://en.globes.co.il/en/article-jerusalem-home-price-rises-buck-national-trend-1001531176