An investor’s paradise

The average apartment bought in French Hill in 2003 has doubled in price.

By JOHN BENZAQUEN
French Hill 521 (photo credit: Courtesy)
French Hill 521
(photo credit: Courtesy)
Rising out of Jerusalem’s northeast corner and offering breathtaking views of the Old City and much of west Jerusalem beyond is the neighborhood of French Hill. One of the seven hills upon which Jerusalem is built, French Hill is a relatively modest mountain that figures prominently in the city’s history and continues to capture the Israeli imagination.
French Hill has nothing to do with France but was named after British officer Gen. Lord John French, first earl of Ypres, who had his headquarters on the hill.
This residential neighborhood was built in the aftermath of the Six Day War in 1967. Work began in 1969, and it was meant to create a demographic link between Jewish west Jerusalem and the Hadassah Hospital compound and the Hebrew University on Mount Scopus, which had been an Israeli enclave surrounded by Jordanian territory. At that time, prime minister Levi Eshkol envisioned that it would become the first planned urban community in modern Jerusalem, providing as many services as possible to cater to the needs of its residents. Services in the neighborhood include a commercial center, bank, supermarket, post office, medical facilities and schools that are considered among the best in the city.
French Hill has a population of 6,600. The neighborhood provides a high quality of life in a quiet, pollution-free setting with parks and three fitness centers, as well as a new community center that caters to all ages. There are many synagogues ranging from Reform to Orthodox, as well as a mikve. The neighborhood is a 40-minute walk from the Western Wall, while the new light rail service will enhance the already efficient transportation network, providing easy access to all areas of Jerusalem.
French Hill consists of two main types of buildings: the multistory buildings on the top of the hill, and the terraced homes, called Tzameret Habira. Many Hebrew University professors and students live in French Hill due to its proximity to the university’s Mount Scopus campus. There is also a large population of doctors and medical professionals who work at Hadassah Hospital on Mount Scopus. Many diplomats, consular personnel and journalists own or rent apartments in the area as well, due to the easy access to major thoroughfares reaching Tel Aviv, the Dead Sea and other areas of the country.
From a real-estate perspective, French Hill has gone through both peaks and valleys in terms of price fluctuation. Over the last 15 years, the neighborhood saw peaks from 1995 to 2001 when prices were high, supply was low and demand for lovely terraced homes had peaked. With the start of the second intifada in 2001, prices dropped dramatically due to a number of bombings around the area.
Alyssa Friedland, owner of RE/MAX Vision, states that “Up until 2003, demand had dropped considerably, and small threeroom (60 square meters) apartments were selling for as low as $115,000; four rooms (100 sq.m.) for $215,000; and terraced homes for $350,000. Investors flocked to the area, knowing that the fear factor would end and prices would eventually rise. They were right. Within two years, prices had risen more than 15 percent.
Now the average three-room apartment purchased in 2003 has doubled in price,” she says.
Even with the dramatic profit already attained, the appreciation potential in French Hill has still not reached its full potential. With increased demand from young religious couples and no further new building expected in the area, the neighborhood could still see a rise of another 15%-20% over the next two to three years.
According to real-estate expert Nelly Ephrati-Artom, “The area has recently seen an influx of young modern Orthodox buyers who cannot afford the high prices in neighboring Ramat Eshkol, which have increased by over 20% in the last three years. The combination of high demand from potential buyers, coupled with excellent rental incomes from students and diplomats, makes French Hill an investor’s paradise.”
One investor who bought a two-bedroom, 60 sq.m. garden apartment for NIS 500,000 four years ago, recently sold it for NIS 1 million, doubling his money while generating a 4.4% return on his investment. Comparable properties in Ramat Eshkol are approximately NIS 350,000 to NIS 400,000 more expensive.
Ephrati-Artom adds, “Savvy investors are realizing that they can generate returns of 4%-5% annually for the next few years while anticipating attractive appreciation potential in the near future. Although French Hill will always be on the ‘other side of the tracks,’ it is quickly becoming the more attractive alternative for young couples and investors looking for affordable housing and profitable investment opportunities.”