Israel's Housing Starts Decline Amid Mixed Construction Trends

Israel experienced a 7% decrease in new housing starts over the past year, with 76,040 units beginning construction between July 2025 and June 2026. This decline contrasts with a 2% rise in building permits issued, totaling approximately 83,340 units, and a 7.9% increase in completed constructions, reaching 60,970 units.

The central and Tel Aviv districts continue to be the primary hubs for construction, accounting for nearly half of all active building projects. The Central District led in new starts with 25.3% of the total, followed by Tel Aviv with 22.9%, and the Southern District with 18.4%. Tel Aviv saw a significant 19.9% increase in new housing starts within the city limits, with 7,611 units beginning construction. Other cities like Haifa and Kiryat Gat also reported substantial increases, while Jerusalem experienced a sharp 30.1% drop.

Of the new housing starts, 69.9% were designated for sale, with 13.3% of these benefiting from government subsidies, primarily in the Central and Southern Districts. The remaining 30.1% were not for sale, including self-build projects, combination deals, and rental units. Urban renewal projects, including those under TAMA 38, accounted for a significant portion of new construction, particularly in Tel Aviv and the Central District.

Despite the overall drop in new starts, the duration of construction projects has lengthened, with the average building time increasing to 31.8 months. The total area for all construction starts reached 17.9 million square meters, with residential construction making up 79.2% of this figure. Non-residential construction, including commercial and industrial spaces, comprised the remaining 20.8%.