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Making a Home in Jerusalem: What you Need to Know to Buy in Israel’s Capital

 Jerusalem is a city of interlinked neighborhoods, each of which has its own distinctive character and types of housing. The average price of a home in Jerusalem in the last quarter of 2023 was NIS 2.7 million – or $732,400. This was little changed over the last year, but follows a long period in which Jerusalem house prices have steadily risen.  


Prices also vary considerably by area, and areas themselves differ wildly in terms of the type of population and the housing and other amenities that they include. Proximity to bus routes and light rail stops is key to getting around, in a city of narrow streets with limited parking. 


Most homes in Jerusalem are apartments, and many are small and old. If you have your heart set on a house, you may be better off looking at locations within easy reach of Jerusalem where houses are more common – such as Maale Adumim, Efrat, Bet Shemesh or Modiin. 


To make your home in Jerusalem it really helps to focus on which part of Jerusalem suits your needs. There are dozens of different districts, each with a particular vibe of its own and often a distinctive population. But here is a rundown of some of those that are most lively and popular for those coming from abroad. 


Arnona sits on one of Jerusalem’s hills, in the Southern part of the city. Founded in 1931, it is effectively a suburban town in its own right. Heavily built up in the 1980s, it includes the American Embassy, and is seen as upscale. Most buildings are no more than six storeys high. It borders on Talpiot, a major commercial center but with some housing dating back to the 1920s as well as eight storey blocks in East Talpiot. 


Baka was first built up in the late 19th Century around the original Jerusalem railway station. Its mansions have since been renovated and turned into apartments while retaining many of the original features. Its central street – Derech Beit Lechem – features cafes, restaurants and designer stores. 


Katamon lies in south-central Jerusalem and is officially called Gonen. It was founded in the 1900s and became a Jewish neighborhood after 1948. There are many older houses and buildings, and the area is popular with Anglos and includes a number of anglo synagogues and cultural organizations. 


Nachalot is a collection of 23 courtyards in Central Jerusalem surrounding the Mahane Yehuda market. The area began to be built up in the 1870s as the population overspilled from the Old City. Today the area is highly sought after and has become increasingly gentrified with the reinvention of the market which lies at its heart. 


Rehavia  at one point was going to be a model garden district, like the garden cities of Europe, when planning and construction started in 1922. Not all the plans were realized, but the streets were kept intentionally narrow to discourage heavy traffic, and commercial businesses were restricted to some key streets. Today it remains particularly green and much sought after, while also including the Prime Minister’s official residence. 


Also popular with Anglo purchasers is the area known as The German Colony (the Moshava). First built up by a German Christian offshoot in the second half of the nineteenth century, the area has been Jewish since 1948. Its central street is Emek Refaim which is lined with cafes, bars and restaurants. The original buildings have a range of distinctive features which newer building has sought to replicate.  


Older buildings will often offer larger rooms, and greener surroundings. But they may also be in need of extensive refurbishment and the common areas can be less appealing. If there is an elevator, it is probably a small one, and outdoor space may also be more limited. Newer buildings will tend to have more, but smaller rooms and will almost invariably come with a balcony. They may also be nearer to shops and travel links, because they have been designed to provide extra housing alongside them.  


TAMA 38, as it is generally known, has been very popular in Jerusalem and you may well come across apartments that have been through the program or are scheduled to do so. The national Israeli initiative which has now been around for a number of decades is intended to upgrade older buildings to make them earthquake resistant. In Jerusalem (and Tel Aviv) it is also heavily used to extend existing apartments, creating larger spaces and balconies where there were none, and often building above existing apartments to create penthouse floors. These types of apartments can be a good option if looking for something that combines the old and the new. 


Although one of the world’s most ancient cities, Jerusalem is continuing to grow and evolve. Ultra-orthodox districts in particular are becoming denser and expanding, while Jerusalem’s public transport network is still growing. Surveys show that the majority of those who grow up in the city choose to stay and build their lives in Jerusalem, while it remains a popular destination for new immigrants. 


A good Jerusalem-focused realtor will be able to help steer you towards districts that fit your needs and your budget. Be sure to walk around and soak up the atmosphere before committing. And remember, Jerusalem’s population is particularly diverse so if one area doesn’t suit the chances are that there will be another one that does. 


IsraTransfer can act as your trusted partner to move your money into and out of Israel, offering better exchange rates than banks and a much smoother process. Find out more about us online at


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