Israel's Central Bureau of Statistics gave fresh ammunition this week to forecasts of falling apartment prices, but the article argues the real signal is the long slide in land prices. While home prices fell only 0.3% in April and 1.3% year on year, the CBS land index showed a 4.9% annual drop in 2025 and a 25% decline since 2022.
That does not necessarily mean a sharp housing correction is coming, the piece says. Land is the least rigid variable in a developer's spreadsheet, so if builders were expecting a price collapse they would already be bidding much lower for plots. Instead, the market appears to still assume price stability. In the article's example, a developer aiming to sell apartments for 3 million shekels each in a demand area would now have very little room left after construction, financing, VAT and minimum profit are deducted.
The costs have surged over the past few years. The construction input index rose about 16% from 2022 to 2025, and another 2.2% from the start of 2026. The article gives several case studies from contractor Danya Cebus, including projects in Netanya, Sde Dov, Yad Eliyahu and Bat Yam, where per-apartment construction costs have risen from about 790,000 shekels in 2021 to roughly 1.5 million shekels in the Sde Dov project.
Financing is the bigger burden. Developer borrowing costs are now about 8%, versus 3% four or five years ago, while projects have lengthened from two or three years to five or six years, and in some cases longer. Buyers also tend to pay only at key handover, which weakens cash flow. Under those conditions, the article says a 3 million shekel apartment would leave only about 1 million shekels for land, but current costs would require land prices to fall by at least 50%, not 25%, to preserve present price levels.
