Foreign residents, who were behind one in every four property deals in 2006, are continuing to buy up property in the country's capital.
"About one-fourth of property buyers in Jerusalem in 2006 were foreign residents," said Benny Loval, manager of the Jerusalem branches of the Anglo-Saxon real estate agency. "In the central areas of the city, foreign residents were behind every other [50%] property deal."
The annual survey of Anglo-Saxon Jerusalem marked 2006 as a record year for property sales in the capital, totaling $100 million, representing a 20 percent increase over the previous year.
"Average prices for a room in the capital rose by 27% in 2006 over the previous year to a record of $88,319," said Loval.
The survey showed that out of the 400 property deals in 2006, 100 apartments were sold to foreign residents.
Area by area analysis revealed that in the central neighborhoods of Jerusalem including Rehavia, the German colony, old Katmon, Kiryat Shmuel and Talbieh, every other property was sold to a foreign resident. In 2006, 150 properties were sold in the central areas out of which 75 properties were purchased by foreign residents.
"There is certainly a continuing boom of foreign resident buyers in Jerusalem and most recently by the British buyers as a result of the strength of the pound sterling," said Alyssa Friedland, co-owner of RE/MAX Vision and RE/MAX Capital in Jerusalem. "However, although we have seen strong presence by foreign resident buyers over the past year, we would conclude that about one in every six of our property deals in the capital was executed by foreign residents, while one in every four properties was purchased by foreigners."
Anglo-Saxon's survey found that on a country by country comparison of foreign resident buyers, the majority, or about 65% were from the US, about 12% were from France, another 12% were from the UK and the rest from Australia, Canada, South Africa, Switzerland and Italy.
In reaction to the high influx of foreign buyers, the Delek Real Estate Group, which is involved in the development, design and marketing of some of the most prestigious residential projects across the country, has introduced a policy that limits foreigners to buy up to 30% of a project.
That policy, for instance, is being applied to the Dankner-By-the-Sea project in Netanya. Marketing for the project, which is expected to be finished within two years, began in June last year. A five-room apartment in the luxurious residential tower, costs around $375,000, and total sales are expected to be $45m.