When thinking about Jerusalem, most people think of the city center, the Old City and historical neighborhoods such as Rehavia, Talbieh and Yemin Moshe. Jerusalem, however, is much more. Spanning from Kochav Ya’acov and Pisgat Ze’ev in the North to Har Homa and Gilo in the South, it is a city full of diverse areas, many of which often have been regarded by buyers as less desirable – Jerusalem’s “ugly ducklings.”
With the current slowdown in the property market and the general economic downturn, many buyers now are turning to these neighborhoods in an attempt to find good deals at more affordable prices. The discovery of these areas has snowballed, with friends bringing friends and new communities springing up where, until now, the market largely has been neglected.
One of the stronger examples of this is Armon Hanatziv, where a vibrant, young kehilla of young families and newly married couples has grown over the past few years. Although this has resulted in an increase in prices, apartments can be still bought for a great deal less than similar properties in, for example, the German Colony, which is only a few minutes away. Similarly, Kiryat Yovel has benefited from the many young couples and families who migrated from areas such as Bayit Vegan in search of lower-priced properties.
Other areas, such as French Hill and Pisgat Ze’ev, have benefited from the new light rail, which now connects them with the city center and the traditionally popular areas of the city.
While the older, historical neighborhoods will always be in demand by buyers looking for traditional Jerusalem properties, the newer outlying areas are now coming into their own and present many opportunities for those buyers willing to search further afield for their small piece of Jerusalem.
Investors, too, have started to look at these peripheral areas in search of properties that are still reasonably priced and have the potential for good capital growth. While those seeking a short term “flip” are still looking outside of Jerusalem in areas such as Beersheba, Ashkelon and Nahariya, those investors who want a medium- or long-term investment or combination investment/holiday home are staying in Jerusalem but have their eyes on the newer, high-potential neighborhoods.
Despite the upsurge in these outlying areas, Jerusalem is still losing more of its young residents than it is gaining, with the city showing net negative growth (excluding natural growth) of around 10,000 people every year.
Even in the “ugly duckling areas,” prices are higher than in many alternatives surrounding the city such as Ma’aleh Adumim, Beit Shemesh and, of course, the various settlements in the Judean Hills and Yehuda and Shomron.
Now, even as Jerusalem’s “ugly ducklings” are being seen as the “swans” they always were, they are being replaced by new “ducklings” outside the city, which, no doubt, will become the “swans” of tomorrow.
Raphi Bloch is the manager of the Re/Max Vision real-estate agency in Jerusalem.