Israel's Housing Market Sees Divergence: New Homes Stable, Resale Prices Drop

Israel's Central Bureau of Statistics (CBS) has begun differentiating between new and resale housing prices, a move likely prompted by criticism of its previous methodology. The updated data reveals a significant divergence, with resale property prices, particularly those lacking a protected room (Mamad), experiencing notable declines. In contrast, new home prices remain relatively stable, largely supported by financing incentives.

Analyzing data from June and July, the CBS reported a modest 0.2% increase in overall housing prices compared to May-June, marking the second consecutive month of gains and suggesting a potential market correction. However, this contrasts with a larger 1% drop reported in July's index. Year-over-year, the overall housing price index has decreased by 1.2%, translating to an average reduction of approximately NIS 25,000-30,000 per dwelling.

When examining the second quarter of 2026 against the first, new home prices rose by 0.5%, while resale home prices fell by 1.2%. This quarterly perspective highlights regional variations. From May to June, prices declined in Jerusalem (-0.4%), the North (-0.1%), and Haifa (-0.3%), while the Center (0.3%), Tel Aviv (0.7%), and the South (0.1%) saw increases. Year-over-year, significant price drops were recorded in the Center (-3.2%), Haifa (-2.4%), Tel Aviv (-0.9%), and the South (-0.6%), with Jerusalem (1.1%) and the North (1.0%) showing increases.

For new homes, the proportion of discounted transactions rose from 37.8% to 41.2%. Even after excluding government-subsidized deals, new home prices increased by 0.4%, indicating minimal impact from subsidies. Over the past five years, new home prices have climbed 25.2%, compared to a 29.3% rise in all housing prices. Resale prices, which fell 1.2% in the last two months, saw decreases in Jerusalem (-2.9%), Tel Aviv (-2.0%), and the Center (-1.1%), while the South (0.3%), North (0.1%), and Haifa (0.1%) experienced slight increases in the second quarter.

The CBS announced that the resale housing price index, both national and regional, will now be published quarterly in March, June, September, and December.