Early in the morning, near Azza Street in the German Colony, families with strollers pass by signs advertising luxury garden apartments for sale, and around the corner, an English conversation with a strong New York accent can be heard. These are not tourists - these are the new buyers in Jerusalem’s luxury market.
In a city that grew between stone walls and history, a unique real estate phenomenon is taking shape: an international luxury market that continues to thrive even as other real estate markets in Israel show signs of slowing down. The engine? Wealthy foreign residents, mostly religious Jews, who seek not just property, but belonging.
“When someone buys an apartment in Talbiya or Rehavia, it’s not just because of the design or the location,” explains Oren Cohen, CEO and owner of Oren Cohen Group, who is at the heart of prominent deals in the city. “It’s a purchase of value, identity, an unbreakable connection to Jerusalem and the State of Israel.”
A Market with a Unique Identity
Data from the Tax Authority shows an increase in luxury transactions in Jerusalem: in 2024, nine apartments priced over NIS 20 million were sold, at an average price of NIS 32 million per apartment, compared to only six apartments in 2023, which had an average price of about NIS 43 million.
However, according to Cohen, official data does not tell the whole story: “Many transactions are happening under the radar, especially those involving the purchase of several housing units by the same family, to connect them in the future or bequeath them to children. The official numbers do not include this part, so the picture is very partial.”
An Apartment in Jerusalem as an Emotional Passport
In an era of rising antisemitism around the world, especially in the U.S. and Europe, Jerusalem, precisely because of its Jewish and historical character, has become a strategic destination for wealthy foreign residents.
“We meet buyers who come with tears in their eyes,” shares Cohen. “For them, this is not real estate - it is an emotional, cultural, and family anchor. They tell us explicitly: if something happens in the U.S., I want to know I have a home in Jerusalem.”
Foreign residents see an apartment in the capital not only as an investment but also as a way to strengthen the connection to the younger generation and preserve the Jewish heritage. Cohen adds: “There are quite a few families buying apartments for children still studying in college. It’s part of the family strategy - a home in Jerusalem, the Jewish heart in the world.”
New Projects: Not Just Towers, But Intimacy
In 2025, more than 20 luxury projects are being marketed in the city - some are tall towers, but most are small boutique projects on an intimate Jerusalem scale.
The price per square meter in luxury deals ranges between NIS 50,000 and 90,000, but garden apartments and penthouses in unique projects have already crossed the NIS 100,000 per square meter threshold.
Cohen describes a clear trend: “There are investors who prefer boutique projects with 8-10 apartments, very high-quality construction, a view of the Old City, and private parking. We see such projects selling out completely, even before final permits, to a target audience abroad only.”
Limited Supply, Fierce Competition
The second-hand market in Jerusalem has always been limited, and in recent years has become almost impossible.
“There are apartments listed that sell within hours. A beautiful penthouse in the German Colony? Sometimes before it even goes public, there are already negotiations,” Cohen recounts.
The scarce inventory results from a combination of planning restrictions, environmental sensitivity, and lack of available land for construction in sought-after areas like Talbiya, Rehavia, Old Katamon, and Baka.
Therefore, every apartment that comes to the market, especially if unique, receives immediate attention. “It’s a market of elusive opportunities,” says Cohen, “and whoever is not quick loses.”
Urban Renewal Will Push Forward
In the coming years, more and more evacuation and rebuilding projects are expected even in the older neighborhoods, including downtown. Here too, it’s not about standard towers but mostly construction that respects Jerusalem’s urban fabric.
“We are very careful with towers,” Cohen emphasizes. “Jerusalem is a city with identity, with character. A good project in Jerusalem is one that blends in, not one that screams.”
Meanwhile, in the large projects managed by his office, between 65% and 90% of the apartments have already been sold - even before the completion of the parking excavation phase.
What Does the Future Hold?
Both the complex security situation and the global economic upheavals, like Trump’s tariffs saga, have not changed the trend. The luxury market in Jerusalem continues to flourish, not despite the times, but because of them. The rare combination of limited supply, emotional and business demand, quality development, and value that is not only economic but also meaningful, puts the capital in a rare leadership position, unique even compared to global cities.
“Jerusalem has always been an exception in the landscape,” Cohen concludes. “You can’t fully explain what makes someone buy a NIS 30 million apartment in Jerusalem. It’s a decision that comes from the heart, not the pocket. It’s not just real estate. It’s trust. It’s history. It’s vision. And in the end, there really is no other place in the world where a Jew will feel as safe as in Jerusalem.”