Israeli Housing Market Sees July Sales Dip Amidst Regional Surges

Following a slight recovery in May and June, Israel's housing market experienced a downturn in apartment sales in July, according to data released by the Central Bureau of Statistics (CBS). A total of 7,598 apartments were sold in July, a decrease of approximately 15.6% compared to June's 9,003 sales and 8,561 in May.

However, a broader look at the May-July period reveals a different trend, with 25,160 apartments sold, marking a 20.8% increase from the preceding three months (February-April) and a 14.6% rise compared to the same period last year. New apartment sales saw a significant jump of 30.4% compared to the previous quarter and 42% year-over-year, with 10,470 units sold. Notably, 33.7% of these new apartments were sold under government subsidy programs. In contrast, the resale market saw a more modest increase of 14.8% in sales over the May-July period compared to the previous quarter, but only a 0.8% rise compared to the previous year.

The Central District led in overall apartment sales during May-July, accounting for 23% of transactions, followed by the Southern District at 22.4%. The Southern District led in new apartment sales (25.5%), while the Central District dominated the resale market (24.6%). Significant year-over-year increases in new apartment sales were observed in Tel Aviv, the Southern District, Haifa, and the Northern District, though the Central District saw a slight decrease.

Individually, Tel Aviv-Yafo led in new apartment sales with 1,157 units sold between May and July, a 22.6% increase. Kiryat Gat followed with 768 new apartments. The most dramatic surge occurred in Or Yehuda, where sales jumped by 963.6% to 351 new apartments from just 33 in the prior three months. Ashdod and Herzliya also saw substantial increases. Conversely, Jerusalem, Rishon LeZion, and Netanya experienced declines in new apartment sales.

Jerusalem led in resale transactions with 937 units, followed by Haifa and Be'er Sheva. Despite the overall sales increase in the May-July period, the inventory of new apartments remained high, with approximately 84,990 units available for sale at the end of July, representing a 26.9-month supply. The Ministry of Finance reported that July was one of the weakest months for the "free market" (excluding subsidized sales) in two decades, with total sales down 12.2% from June and 4% from the previous year.