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JIIS Bulletin - May 2012
Building on housing
The downward annual trend in the number of newly completed housing units continued for the third year running in 2011 – in opposition to the trend in the rest of the country, moderate as that may be. In figures, the new apartments (1,355 of them) represented 4% of the total of new housing units in the whole country – despite Jerusalem’s population being about 10% of that of Israel. 

The neighborhoods with the largest number of new residential units are, in the Jewish neighborhoods, Har Homa and Gilo in Jerusalem (22%), and Beit Hanina and Shuafat refugee camp in the Arab neighborhoods, with approx. 10% of the new homes. 

Apartments with 1-3 rooms appear to be the least popular, in Jerusalem as well as around Israel, but while newly constructed units of 4 rooms represent about a third (36%) of the market in all of the country, this size flat is most popular in Jerusalem, at 60% of the total. Interestingly, these two figures are inverted when speaking of units with 5 or more rooms – 60% in Israel and 34% in Jerusalem. In other words, says JIIS researcher Yair Assaf-Shapira, "the mid-size unit is most popular in the capital while in Tel Aviv it is mostly larger residences that are being built."

As for housing prices, the average cost of a 3.5-4-room unit in the capital was NIS 1,745,000, considerably higher than the national average of NIS 1,159,400 and lower than that in Tel Aviv, NIS 2,125,600. But while housing prices around the country – even in Tel Aviv – began to dip toward the end of 2011, in Jerusalem they continued to rise. Indeed, for this size apartment in Jerusalem, supply does not meet demand. 

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