Gilo, Har Homa, and Ma’ale Adumim are the main victims of the violent disturbances of recent weeks. While the entire Israeli apartment market has been hurt, with sales declining 25% and sales to foreign residents falling even further, the above-mentioned three neighborhoods have taken the heaviest blow.
It should be emphasized: Gilo is a huge neighborhood in southern Jerusalem, with 40,000 residents. Most of it has been only partially affected, with some deals still taking place. At least two houses on Hamehanehet Street near a park in northern Gilo have been sold in recent weeks for $290,000 and $310,000. The hardest and most painful blow is to the six southernmost streets, which are exposed to shooting from Beit Jala. Here real estate activity has fallen to practically nothing, and it is easy to understand why.
Jonathan Roth owns the real estate brokerage Roth Anglia, located in Gilo and one of the largest in Jerusalem. He says, “There is not a single buyer for the southern streets of Gilo, but there are almost no sellers, either. There was one owner of an apartment on Ha’anafa Street, who entered my office on Sunday and said, ‘I don’t want to live here – find me a buyer,’ but there are no buyers here at the moment. In normal times, three-room apartments sell for $100,000-110,000 and four-room apartments for $130,000. Today all those prices are meaningless.”
Real estate broker Amir Bar manages the Gilo branch of the Nadlan Plus chain. Bar told “Globes”: “There is no activity in the southern streets. There is demand on the other streets, but only from people who were negotiating to buy before the shooting. We have just sold a large three-room apartment on Rehov Hahasida for $127,000, which is the normal price. I haven’t encountered cases of panic-stricken people willing to reduce prices in order to sell.
Shiran, the central office of Jerusalem brokers, reports 13 deals for second-hand apartments took place through its offices in October, compared with 31 in September. Some of the fall in activity is attributed to the Jewish holidays.
The situation in Ma’ale Adumim is not much better. While the town is all-Jewish and at a distance from the main fighting, real estate deals have nevertheless been hurt, mostly purchases of first and second-hand apartments. The Yassur firm, which is constructing 115 apartments in Ma’ale Adumim, regards its success in selling two apartments in recent weeks as a great achievement. A four-room apartment was sold for $170,000 and a five-room apartment for $195,000. One of the buyers was a policeman working in the area, while the other is a settler in the territories, who decided to move to a safer place near Jerusalem.
Baruch Odessi, Re/MAX franchise holder for Rehavia, believes that business in the older neighborhoods, such as Rehavia, Talbia, Katamon, and the German Colony, will not be affected. He even expects increased demand in the Beit Hakerem, Givat Shmuel, and Givat Mordechai neighborhood, due to residents seeking to sell their apartments in the problematic neighborhoods and move to quieter areas.
Aliza Friedland, Re/MAX franchise holder for French Hill and Ramat Eshkol: “Activity is at a standstill. We sold only one apartment last month. On the other hand, rental activity has greatly increased; we are closing three to four deals per week. Most tenants live over the Green Line, who have decided to move for a while to apartments in relatively quiet areas. We have leased three-room apartments for $550-600 per month and four-room apartments for $750-800 per month. The prices are unchanged at the moment.”
”Globes”: Have deals also been canceled in the older neighborhoods?
Friedland: ”A family from Philadelphia, which was about to buy a house in Rehavia for $328,000, changed its mind after the fighting broke out and canceled the deal.”
Dozens of contractors are constructing over 1,000 apartments in Har Homa under past contracts and tenders. When the shooting started, the sales stopped. No one is more qualified than Yigal Biton to comment about the situation in this area, and others areas also. Biton owns B. Yair, perhaps the largest contractor in Jerusalem, which is constructing 1,000 apartments in various locations. Biton has personally suffered from what has happened to the apartments market in Jerusalem in recent weeks.
Biton stated, “Sales in Har Homa have come to a complete standstill since the fighting started. We are the largest contractors in Har Homa, with 450 apartments under construction, of which we have sold 180 to date. The day the shooting began, not only sales stopped, but also interest. Almost no one is coming to building sites. Har Homa is opposite Tzur Bahar, an Arab village. The Palestinians fired one volley at Har Homa, and it was enough to bring sales to a halt. I assume that they know that the buildings are under construction and no one lives there, so they settled for one volley.”
”Globes”: Has construction suffered in other areas also?
Biton: ”There is no place in the Jerusalem region that has not suffered. The settlement of Adam, for example, where we are building 82 apartments and houses, is a wonderful location and was in great demand until the last month. We are offering houses for $170,000. The problem, however, is that the settlement borders Ramallah. Sales are paralyzed. There are obviously difficult problems with Givat Ze’ev, since the road there is frequently blocked and those traveling it risk a barrage of stones. We are building 76 houses and are making progress even without Palestinian workers, thanks to foreign workers. We have sold only five units, and no unit has been sold in the past month.”
Where have you managed to sell apartments?
”The silver lining is Pisgat Ze’ev, because the road there is safe. We are building 162 apartments there, and at the moment have posted only a small decline in sales. It may be that Jerusalemites wishing to buy apartments in problematic neighborhoods changed their mind and decided to move to the safety of Pisgat Ze’ev. I assess that the picture is similar in the city’s western neighborhoods.”
Published by Israel's Business Arena on October 29, 2000