Eucalyptus project under construction.
When war breaks out in Israel, many people assume housing prices will collapse. In reality, that rarely happens—especially in Jerusalem.
When war begins, we receive many emails and WhatsApp messages asking how the conflict affects housing prices. Many people understandably assume the real estate market will crash, based on what typically happens in most countries: buyers retreat, sellers cut prices, sales activity slows down, and prices drop.
Jerusalem real estate, however, often tells a different story.
The immediate effect of war on Jerusalem’s housing market is usually not falling prices, but falling activity. Transactions slow, showings become less frequent, and buyers temporarily step back while the national focus shifts to security and survival. In the first weeks of a conflict, the market often grows noticeably quieter.
However, unlike in many countries, sellers in Jerusalem rarely rush to slash prices during wartime. Instead, many simply wait. This is somewhat ironic, given that Israelis are not exactly famous for their patience. But when it comes to selling real estate during war, patience suddenly becomes a national virtue. Having seen this pattern before, most sellers understand that the conflict will eventually end and that the long-term fundamentals of the housing market will remain intact. Rather than accepting lower offers, they often choose to delay transactions until the situation stabilizes.
Another reason prices tend to hold steady is Jerusalem’s persistent housing shortage. The city’s population continues to grow rapidly, while new construction has struggled to keep pace with demand. Limited land availability and strict planning constraints place constant pressure on supply.
In Jerusalem, the housing market has been shaped more by long-term demand and limited supply than by temporary crises. These underlying conditions do not disappear during wartime.
Even when construction continues, war can still disrupt the supply pipeline. Permitting, inspections and logistics often slow down, and small delays can translate into fewer apartments reaching the market on schedule. During these periods, the housing market often enters what economists call a “low liquidity” phase: fewer deals take place, but prices remain largely stable.
Of course, wartime uncertainty can create short-term hesitation. Buyers may want to see how events unfold before committing to a major purchase, and developers may delay launching new projects until conditions stabilize. Historically, however, these pauses have tended to be temporary rather than lasting trends.
Interestingly, while domestic buyers may pause temporarily, interest from overseas can sometimes move in the opposite direction. After the Oct. 7 attacks, for example, we experienced a surge in purchases from clients living in the Diaspora. For some, the motivation is aliyah. For others, it is emotional connection or solidarity. And increasingly, in an era of rising global antisemitism not seen since World War II, the motivation is practical: a growing number of Jewish families want a foothold in Israel—a place waiting for them should they ever need it.
As discussed in a previous column, Israel’s housing market has consistently demonstrated resilience once conflicts end. Historically, the quiet that sometimes accompanies wartime real estate activity is usually followed by renewed demand once stability returns.
For now, the wartime market is characterized less by falling prices and more by hesitation. Domestic buyers are cautious, transactions are slower, and sellers are waiting. But the overseas market is in overdrive, despite the relatively weak dollar. The underlying drivers of Jerusalem’s housing market—population growth, limited land, and enduring global Jewish demand—remain firmly in place.
Wars may sometimes slow Jerusalem’s housing market. But they rarely break it. In fact, in the markets where we are most active, demand has remained surprisingly strong.
Gedaliah Borvick is the founder of My Israel Home (www.myisraelhome.com), a real estate agency focused on helping people from abroad buy and sell homes in Israel. To sign up for his monthly market updates, contact him at [email protected].
