German Colony Real Estate - Apartment Prices in Jerusalem

November, 2006 - Copyright by Morris Rosenthal - - contact info

I thought I'd start off this page with a side of the German Colony that probably won't be around much longer. It's the old train station built by the British during the mandatory period. It's hard to believe, looking at this neglected shell, that I took a train to Tel Aviv from this station years and years ago. It I remember, it took about two and a half hours. To walk from the train station to the heart of the German colony takes less than five minutes. It's one of the strangest features of Jerusalem that large, abandoned and decaying properties coincide with million dollar real estate. In some cases, it's no doubt a question of political wrangling to find out how the value of the property will be divided up between the cronies. There's also an abandoned government textile research lab right on Emek Refaim. The old train tracks still run right through the neighborhood, dividing it from Makor Chaim on the other side, and the right of way is wide enough to build plenty of apartments. I don't know whether the current Malka station will always be the end of the line in Jerusalem, or if there's a plan to bring the train back to the German Colony, where it couldn't hurt the real estate values:-)

The sign on the villa to the left, found on Emeq Rephaim, says it all. "No Towers in the German Colony." With the end of the master expansion plan for Jerusalem, the new approach will be to start building anew in the developed sections, and no doubt, to start inching up the height limits. There are no high rise apartment buildings worth mentioning in the German Colony, which is part of it's charm, but I wouldn't bet that the situation will continue indefinitely, particularly with the high demand for luxury housing in the area. I usually refer to Kol HaIr for apartment prices, but for a neighborhood popular with rich Americans, the Jerusalem Post has quite a few listings as well. I found five ads with prices in this weeks Post, which ranged from $825,000 to $2,750,000. These are American sized houses that are normally unheard of in the heart of Israeli cities, the smallest listing was 160 sq. meters and the largest was 315 sq meters, plus a 50 meter basement and a 150 meter garden. If you only looked at the real estate ads in the Post, you'd come away with the impression that you have to be a millionaire to buy in the German Colony.

The ads in Kol HaIr, in Hebrew, pitch a slightly different story. Of the ads that showed prices, the range went from $280,000 to $950,000. Ignoring a Greek Colony apartment included in the Moshav HaGermanit listings (the neighborhoods do border each other and blend together on the map), there were three apartments listed under $400,000. For $280,000, you can buy a 3.5 room apartment on the second floor, 80 sq. meters, and no other details which makes me suspect there's no mirpesset. For $360,000 you can buy a 3 room apartment that is billed as "suitable for handicapped", but beware, the owner is interested in "serious inquires only!" A listing for Rehov Rachel Imeinu on the fourth floor (with elevator) offers a 3 room apartment for $340,000. I seem to remember seeing a one room apartment in the German Colony for around $80,000 not too long ago, and while you could probably rent it out for $500/month, it's a heck of a lot of money to pay for a walk-in closet.

The main attraction of the German Colony to Americans is other Americans, or at least, that's the way I see it. Yes, there are a half dozen coffee shops on the main drag, you can walk to the Cotel if that's your thing, and there are several hamburger restaurants. There are also a lot of high priced boutique type stores that only Americans and French can afford to shop in on a regular basis. English is heard on the streets at least as much as Hebrew, and the Hebrew is often spoken with a accent. What drives the real estate market in the German Colony is that Americans continue to buy properties there. Fortunately, unlike the ghost developments along side the walls of the old city, foreigners who buy in the Moshav tend to live there, or maybe a family buys a property for an investment when a kid moves there for school. If you bought an apartment in the Moshav in the 1970's, you'd probably make a thousand percent on your investment if you sold today. Does that mean there's any chance that a $500,000 apartment purchased today would sell for five million dollars in another 35 years?

Compared to many neighborhoods, there's very little new construction activity in the German Colony, which also helps prop up the prices. The available land has been pretty fully exploited, unless they remove the height limits on buildings. Renovation is much more common in the Moshav than new construction, but you can find cement mixers and pumpers if you look around a couple corners. I talked with the contractor on this particular job who probably was checking me out to see if I was a newspaper reporter or something. He was very proud of the particular job they were doing since they were reusing all the outer wall stones of the house that had been torn down to make room for the newer, bigger building. That's about all you can do if you want to build new in the German Colony, American style tear-downs. I lived right off Emek Refaim for about a year in the late 1990's, three months at a time. I used to walk all the way to Mahane Yehuda or to Talpiyot to buy groceries, because the prices in the MaKolets in the area are through the roof.