Israel Sees Housing Starts Surge Amid Sluggish Sales and Falling Prices

In 2025, nearly 80,000 new housing units began construction in Israel, with the completion of 60,000 units. By year's end, over 207,000 apartments were actively under construction. Despite this surge in building starts, the real estate market continued to stagnate, evidenced by a decrease in apartment sales compared to 2024 and a 1% drop in the housing price index, according to data from the Central Bureau of Statistics (CBS).

During 2025, building permits were issued for approximately 80.8 thousand apartments, and construction commenced on about 79.7 thousand. After accounting for roughly 6,000 demolished units, the net number of new housing starts was around 73.7 thousand. Of these, 70.1% were for sale, with 16.2% built under government subsidy. Another 29.9% were not intended for sale, primarily for rental purposes, with 16.2% of those also receiving government subsidies. Urban renewal projects, including TAMA 38 and "Pinui Binui" (evacuation-reconstruction), accounted for 29.5% of new starts.

The total investment in construction for 2025 reached approximately 253.4 billion shekels. Over half of this investment was in residential construction. Meanwhile, apartment sales for the year totaled 90,500 units, a decline from 102,800 in 2024. New apartments constituted 37.5% of these sales, with the remaining 62.5% being used apartments.

The total housing stock in Israel reached 3.02 million units by the end of 2025. The average construction duration remained lengthy, with simple average construction time at 32.3 months, and a weighted average of 37.8 months. While the overall housing price index fell by 1% and new apartment prices dropped by 2.8%, the average rent index increased by 4.3%, with the average monthly rent reaching 4,919.3 shekels.