Israel's Housing Land Sales Plummet Amid War and Political Turmoil

Land marketing for housing in Israel has seen a sharp decline this year, with figures from the Israel Land Authority (ILA) showing only 35,143 housing units offered in tenders and 22,845 units with closed tenders as of late September. This represents less than half the pace of 2025, when 91,993 units were offered and 48,406 closed. Experts fear this low supply could reignite housing prices, similar to the post-COVID surge, although a current historical high in active construction and unsold units may mitigate this risk.

The slowdown is attributed to multiple factors, including the ongoing war, a general slowdown in the housing market, and significant political instability within the ILA itself. The authority has been without a permanent director for nearly a year, with a series of interim appointments and contested nominations creating management paralysis. The upcoming Knesset elections are also expected to further hinder progress in the remaining months of 2026.

Historically, the ILA has conducted a year-end "blitz" of tenders to close gaps, a strategy that significantly boosted 2025's figures. However, with only 70 tenders currently open for bidding out of 422 planned for the final quarter of 2026, it is unlikely this year-end push will compensate for the earlier deficit. This concentrated release of tenders could also overwhelm developers, potentially leading to missed opportunities.

Despite the challenges, the Ministry of Housing and the ILA maintain that the marketing gap will be closed, with promises to reach last year's numbers. The ILA stated that while 2026 saw a decrease in marketing due to various economic and planning obstacles, the high inventory of unsold units and reduced developer interest due to high interest rates mean the impact on housing prices will be less severe. Forecasts for 2027 anticipate a significant increase in marketed housing units due to new agreements with local authorities.