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These buyers don't live in their apartments on a regular basis, but rather come here for short periods and then return to their homes abroad. Their actions are often motivated by specific economic conditions (mainly the dollar/euro exchange rate) and growing anti-Semitism overseas.
When these conditions change, say some realtors, the wave of purchases will also subside, and the inflated prices of recent transactions by foreign residents in high-demand neighborhoods will slide back to realistic levels, in keeping with the rest of the Israeli real estate market. Hershkowitz totally disagrees.
What makes you think differently?
"First," says Hershkowitz, "many people relate to Diaspora Jewry as a single unit with homogeneous tastes, drives and similar behavior. The explanations citing the increase in the euro/dollar exchange rate and anti-Semitism are true, for example, only concerning European Jewry. The fact is, however, that most of the buyers are Americans who have not suffered increased anti-Semitism, and for whom now is not the best time to buy property if one uses an economic test. Furthermore, it is also a fact that most foreign Jews are buying properties at high prices and are not making a good deal from the point of view of a financial investment. They are being guided by far deeper sentiments than the exchange rate and the local real estate market."
So what do you think is happening among Diaspora Jewry?
"What we have here is a historic coincidence that has prompted American and European Jews to buy property here at the same time, for completely opposing reasons. The Americans feel stronger than ever in their own country, and their economic situation there is excellent. The purchase of apartments for a million dollars or more, which used to happen once a month, has now become a weekly occurrence. Americans who come to Jerusalem tell me they have come to buy a property for $500,000. After a tour with an agent, they tell me, `We have decided to invest a little more and buy something for a million.' For them, this is no problem.
"They already own one or two or three homes, and an additional home in Jerusalem might come at the expense of a house in Florida, for example. They are happy to buy here, and view it as a step up in their relationship with the Jewish State from that of the past, when they were satisfied with substantial donations to the United Jewish Appeal or a purchase of Israel Bonds. True, they don't live in Israel, but owning an apartment here strengthens their ties to Israel.
The Europeans, on the other hand, are motivated by fear. The second intifada only made their situation worse, as it triggered harsh Muslim reactions in their countries that had not existed before, even during the first intifada. Suddenly they were faced with a quick, painful demonstration of the changing mood and demographics in Europe, and they understand that it is worthwhile for them to have a back-up for their current homes."
What do you glean from your conversations with buyers?
"First, the Americans. They are a large public of people who became very wealthy in recent years, and many of them are religious. For many of them, buying a home in Israel is the realization of a childhood dream that has been made possible right now, thanks to their economic situation.
"The French speak openly, while the English are less forthcoming, but one can still detect their feelings that the recent rise in anti-Semitism is more than just a temporary fluctuation, due to the increase in the Muslim population in these countries and the extremist elements within that population. In France, some Jews are already saying that this is an irreversible process and that, as time goes on, they will have no reason to stay there.
"The English admit they no longer feel comfortable with what is happening right now in England and they want to have a home outside their country, too, but they do not come right out and say that their future is evidently not in England. In any event, there is a steady increase in apartment purchases by English Jews."
What types of properties are these groups seeking?
"The Americans buy mainly in Jerusalem - in Rehavia, Talbieh, Katamon, Baka, Mamila, Sha'arei Hesed and Ramat Eshkol. Buyers in the latter two are mostly religious.
"The English are totally different. The secular English buy in Caesarea, Herzliya Pituah and Netanya. The latter's prestigious Nitza Boulevard, with its open view of the sea, has taken on an English air as some 30 English families have recently purchased apartments there. Religious English Jews buy in Jerusalem.
"The French are different again. They are less interested in Jerusalem and like the coast more. Perhaps it is a symbol of Israel. Many buy in Ashdod or Netanya, and unlike the Americans and the English, many are middle class families who buy apartments for $100,000-$150,000. I feel this attests to the severity with which they view the situation in their native country.
"Only one neighborhood has been bought up by so many absentee foreign residents that it has become less popular among Israelis - the luxury David's Village section of Jerusalem, which is very close to the Old City. Walking around there, one can feel the emptiness, and Israelis say it is beautiful, but lifeless. All other projects are much less affected."
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