Legal Uncertainty Over Orthodox Church Lands Cuts Jerusalem Property Values by Up to 30%

A new study from the Hebrew University reveals that legal and political uncertainty surrounding the ownership of Orthodox Church lands in Jerusalem has caused a significant drop in property values, with losses nearing one billion shekels. The research analyzed residential transactions in Jerusalem from 2004 to 2024, comparing apartments on church land with uncertain ownership rights to similar properties with secure rights. It found that apartments on uncertain land sell for at least 14% less per square meter, with price gaps widening to around 30% as lease terms approach expiration.

The study also highlights a 19%-25% lower likelihood of transactions occurring for properties with unclear rights, reflecting market hesitancy. The price divergence began around 2013 and intensified alongside growing public and political debate, as well as sales of church lands to private investors. Researchers Ariel Feiglin and colleagues estimate the cumulative economic damage includes both reduced sale prices and deals that never materialized due to uncertainty.

Their risk assessment model suggests the market assigns roughly a 38% probability that property owners will lose their rights when leases expire, up from 27% before 2017 to 52% afterward. The researchers emphasize that this legal ambiguity imposes a real economic cost on hundreds of families living in these properties, even years before lease expirations. They argue that clear legislative or judicial resolution could restore property values and market activity well before leases end.