Israeli Economy Sees Mixed Housing Market, Tech Appointments, and Pension Debates

Israel's housing market presented a mixed picture in the first half of 2026. The national average home price rose 3.9% year-over-year to approximately 2.392 million shekels. Tel Aviv experienced the sharpest increase at 6.6%, reaching an average of 4.45 million shekels, followed by Ashdod. Conversely, Bat Yam saw the largest decline at 3.1%, with other cities like Hadera, Ashkelon, Herzliya, Ramat Gan, and Petah Tikva also recording decreases. Smaller apartments, specifically 1-2 rooms, saw the steepest price hikes at 8.3%, while larger units experienced more moderate growth. The mortgage market, however, showed strength, with 79.6 billion shekels in new mortgages taken out by mid-2026, a 13.8% increase from the same period in 2025.

In the tech sector, former Mossad chief Yossi Cohen has been appointed president of the advisory board for Quantum X Labs, an Israeli startup developing modular infrastructure for quantum computing. Following the announcement, the company's stock surged approximately 10%, valuing it at around $100 million. Cohen, who also advises SoftBank, will focus on the company's technological and commercial strategy. Quantum X aims to develop a quantum computer with thousands of qubits by the end of 2027, alongside ventures in cyber, communication, and quantum sensors. This appointment aligns with a trend of former senior security officials moving into the tech and defense industries.

A proposal from the National Economic Council, headed by Prof. Avi Simhon, suggests eliminating mandatory pension contributions for employees until age 40. The aim is to increase young workers' net income by about 6%, while employer contributions would remain unchanged. The council argues that individuals face high expenses during these years and that future pensions would not be significantly impacted. However, economic experts warn of long-term damage to retirement savings and criticize the timing of the proposal, released shortly before elections. The plan is expected to be discussed post-election.

Separately, a report highlighted the challenges of peer-to-peer payments, with 76% of Gen Z individuals in the US failing to receive full reimbursements for shared expenses. Over half reported that delays caused tension in relationships, and 46% of those who owe money to friends or family reported owing over $1,000. While the study focused on the US, the issue of collecting small debts from friends is a common dilemma in Israel as well, where person-to-person transfers are the most frequent use of payment apps.

Finally, Eilat Port faces severe operational challenges due to Houthi advancements in Yemen, particularly their control over the Bab al-Mandab strait. The port, which previously generated about 240 million shekels annually, has seen its income plummet to near zero, with only one ship arriving per month on average. Most vehicle imports have rerouted to Haifa and Ashdod ports. While a workaround via Aqaba allows for 15-20% of normal vehicle imports, concerns are high that further Houthi gains could halt even this limited activity. The port is seeking government guarantees and an extension of its concession, while Israel Ports Company warns of the need for land-based alternatives to ensure trade continuity.