Foreign buyer pays $4 million for historic Jerusalem property
The building in the Abyssinian neighborhood features five residential units around an inner courtyard, traditional stone architecture and additional building rights. Eliezer Ben-Yehuda’s former apartment in the same compound is also on the market.
An unusual real estate deal has been completed on Ethiopia Street in central Jerusalem, where a residential property in the historic Abyssinian neighborhood sold to a foreign resident for NIS 12 million ($4M), tens of percent above its appraised value.
The property at 13 Ethiopia Street was initially offered for NIS 13 million. After negotiations that lasted about a year, the deal closed NIS 1 million below the asking price, but at a price significantly higher than the appraisals conducted on the property.
The property sits on a plot of approximately 517 square meters and includes about 188 square meters of built space, divided into five residential units arranged around a spacious inner courtyard. It also has a basement that once served as a water cistern, as well as additional building rights of approximately 120 square meters. The building features traditional Jerusalem architecture, including thick stone walls and arched openings.
Beyond its location and architectural character, the property has an unusual historical connection. It forms part of a residential compound that includes another apartment, situated above the building that was sold, where Eliezer Ben-Yehuda, the reviver of the Hebrew language, once lived. Ben-Yehuda was active in Jerusalem in the late 19th and early 20th centuries.
The Real Estate Center has learned that Ben-Yehuda's former apartment is also on the market, with negotiations over a potential purchase underway. The five-room apartment has 137 square meters of built space and attached balconies totaling 60 square meters.
The Ethiopian Church, which has operated in the area for many years, has also expressed interest in acquiring the properties at 13 Ethiopia Street. The aim would be to expand its grounds and convert the buildings for office use.
Ethiopia Street, near HaNevi'im Street, is one of central Jerusalem's historic thoroughfares. Part of the Abyssinian neighborhood, it is known for its old stone buildings, inner courtyards and properties of historical and architectural significance. The area has longstanding ties to Jerusalem's Ethiopian community and is home to the Ethiopian Church.
Economist and real estate appraiser Hezekiah Haetzni said properties with distinctive characteristics can sell for considerably more than their appraised values, particularly in the luxury market.
“This is a very sought-after area, in which buyers are willing to pay prices higher than the value that a conservative appraiser would estimate,” he said. “As appraisers, we are careful not to chase the market, but in luxury properties the personal taste and preferences of the buyer have very significant weight in determining the price. Sometimes it is a property that has no substitute from the buyer's point of view, and therefore he is willing to pay far beyond its economic value. Therefore I didn't fall out of my chair when I heard that the property was sold for 12 million shekels, even though in my opinion its appraised value should be lower.”
Haetzni said another factor that can explain a price above the appraised value is what is known as a “control premium,” or the additional amount a buyer may be willing to pay to secure control of a property and its associated rights.
“Sometimes there is economic logic in paying a higher price already today, in order to secure control of the property, especially when it is a unique location and a purchase opportunity that will not repeat itself,” he said.
The foreign buyer plans to carry out a comprehensive renovation and adapt the property to his needs.
The deal was brokered by Shmaya Fine of Fine Real Estate, an agency specializing in the marketing of unique properties in Jerusalem and the surrounding area. The buyer was represented by broker Keren Hirschfeld of the KH agency.
