Israel Housing Prices Dip Slightly, Report Finds

The average price of a typical four-room apartment in Israel decreased by 0.3% in the second quarter of 2026 compared to the previous quarter, and by 2.3% compared to the same quarter last year, according to a report by the Alrov Institute. This 2.3% annual decline is steeper than the 1.5% drop calculated by the Central Bureau of Statistics (CBS) for the past year. However, the report emphasizes that this is not a dramatic decrease, equating to an average price reduction of approximately NIS 55,000 per apartment. The institute noted that most apartment purchases do not involve contractor deals or financing benefits, which are utilized in about 10% of transactions. New apartments are typically paid for linearly, and second-hand apartments constitute the majority of the market.

During the second quarter, the average mortgage interest rate rose slightly from 4.69% in the first quarter to 4.72%. Concurrently, the average household income saw a decrease of 2.4% compared to the previous quarter, though it increased by about 0.8% year-on-year. To isolate the impact of these factors, the Alrov Institute analyzed hypothetical scenarios. They found that the minimal increase in the monthly repayment index in the second quarter was primarily due to the rise in interest rates. The required down payment index was influenced by income and interest rates, with price changes mitigating the increase. The number of apartment transactions remained stable, with 6,461 deals in 12 surveyed cities in the second quarter, compared to approximately 6,458 in the first quarter. These figures are similar to 2025, a year in which housing prices also saw minor decreases according to both the CBS and the institute.