Data released recently by the Ministry of Finance and the Ministry for Construction and housing, show that in Israel, apartment purchases by foreign residents summed up to 2.8% of all apartment purchases during the period June 2012 to February 2013. Other populations purchasing apartments were “residence improvers”, buying an apartment which is not their first, but selling their previous one (37%); first apartment buyers (36%); real estate investors (21%); and others (2%).
But in some localities, foreign residents’ purchases proportion was much higher than the national average. The top destinations in Israel for foreign residents seeking apartment purchases were Tel-Aviv, where they were responsible for 7.6% of the purchases, Netanya (7.8%), and, much higher, Jerusalem (12.8%). Noticeable in Jerusalem’s vicinity was Bet-Shemesh, where 6.1% of the purchases were made by foreign residents.
Data allows us to drill down and look at neighborhoods within the city. Neighborhoods in Jerusalem that saw extensive purchase activity for 2nd hand apartments were Rechavia (38% of the purchases), Sanhedria (26%) and Romema (23%). For 1st hand apartments it was Sanhedria (77%), Romama (56%), and Bayit Vagan (53%). 
It has been said that foreign residents purchases raise the prices, and indeed according to the data it appears that foreign residents do not usually buy cheap apartments. On average, they paid 1.99 million shekels for an apartment in Israel, compared to 1.35 paid by residence improvers, 1.11 by investors, and 1.02 by first apartment buyers – almost half the sum paid by foreign residents. The prices paid by foreign residents in Jerusalem were higher, and stood at an average of 2.44 million, second in Israel to Zikhron Ya’akov (2.49) and Tel-Aviv, where they paid 3.23 million per apartment. Other populations who purchased an apartment in Jerusalem also paid more than the national average, but not extremely higher.
Data sources:
· Ministry of Construction and Housing, Department of Information and Economic Analysis
· Ministry of Finance, State Revenue Division