Jerusalem Housing Data Shows 2021 Buyers Gained 50% as Market Slows
A review of Jerusalem real estate transactions reveals high returns for 2021 property buyers compared to minimal gains after 2023. Despite predictions of a double-digit drop, tax authority data shows no nominal capital losses.
An analysis of real estate transactions registered with the Israel Tax Authority reveals a stark contrast in returns for property owners in Jerusalem, depending on their purchase year. While 2021 stood out as an exceptional year for buyers, transactions initiated in 2023 reflect a significant market deceleration.
Comparative Yields by Purchase Year
On Adam Street in Jerusalem, a 3-room apartment measuring 63 square meters on the fourth floor was purchased in January 2021 for NIS 1.4 million. The same property was sold in July for NIS 2.1 million, representing a nominal increase of approximately 50%. This translates to a 10% annual value appreciation, or 7.6% when calculated as compound interest.
Conversely, a transaction on Avshalom Haviv Street from September 2022 involving a second-floor, 60-square-meter apartment closed at NIS 1.545 million. The property was sold in June for NIS 1.71 million. While this reflects a nominal 10% increase, net profits were substantially lower once transaction costs were factored in.
Long-Term Performance and Post-2023 Slowdown
Long-term investments continue to show robust historical growth. On Moshe Kol Street, an apartment purchased in 1999 for NIS 1.31 million was recently sold for NIS 4.25 million. Across multiple analyzed transactions, properties acquired up until the end of 2022 generated average annual returns of 8% to 10% (non-compound). Properties purchased six to eight years ago yielded similar annual gains.
However, buyers who entered the market in early 2023 faced a different reality. On Antigonus Street, a 4-room, 81-square-meter apartment bought in February 2023 for NIS 2.82 million was recently resold for NIS 3.195 million, reflecting an annual appreciation of just 4%.
Market Reality Defies Economic Forecasts
While the data confirms a clear market slowdown since 2023, it contradicts predictions by some economists who anticipated double-digit price drops. Out of 20 tracked transactions, not a single property registered a nominal capital loss. Prices rose again in 2024 due to developer financing incentives, before stabilizing in 2025 following new regulatory restrictions imposed by the Supervisor of Banks.
