Israeli Garden Apartments Market Shrinks 39% in Two Years, Prices Rise

The market for ground-floor apartments, known as garden apartments, in Israel has seen a significant decrease in transactions over the past two years, even as prices have climbed. Data from the Israel Association of Real Estate Appraisers, based on tax authority records from the first half of 2024-2026, reveals a 39% drop in garden apartment sales in the first half of 2026 compared to the same period in 2024, with 278 transactions versus 455. However, this represents a 12% increase from the first half of 2025, which saw 250 sales. Garden apartments constitute a small fraction of the overall housing market, less than one percent of tens of thousands of apartments sold annually.

The most expensive garden apartment sale in the first half of 2026 was in Tel Aviv for approximately NIS 39.2 million, a transaction that skewed the average price. This luxury unit spans about 320 square meters with a 150 square meter yard. Conversely, the cheapest garden apartment sold during this period was in Ofakim for under NIS 1.2 million.

A notable shift in the market composition is the rise in sales of apartments in projects not yet completed. In the first half of 2024, only about 5% of garden apartment sales were for units in under-construction projects. By the first half of 2026, this figure rose to 32%, with 90 such transactions, indicating a near fourfold increase in the number and a more than sixfold rise in their proportion of the market within two years.

Despite the decline in transaction volume, average prices have increased. The average garden apartment price rose by 11.6% over two years, from approximately NIS 2.51 million in early 2024 to about NIS 2.8 million in early 2026. The price per square meter also increased by about 13% in the same period, reaching approximately NIS 22,200. The median price, less affected by outliers, also saw a steady rise, from about NIS 2.13 million in early 2024 to NIS 2.35 million in early 2026. This price increase is partly attributed to a shift in the location of sales towards high-demand areas, with Tel Aviv seeing an increase in transactions and a widening price range.

Nehama Bogin, Chairwoman of the Israel Association of Real Estate Appraisers, noted that the market's focus is shifting from existing stock to new construction. She explained that the value of a garden apartment depends on factors beyond size, including location, orientation, and integration with living spaces. Ayelet Pichon Oz, Marketing and Sales Manager at Yushpa Group, highlighted that garden apartments in Tel Aviv appeal to families who wish to remain in the city and expand their living space without relocating. In contrast, southern cities like Ofakim, Ashkelon, and Beersheba accounted for nearly a third of all garden apartment sales in early 2026, with Ofakim showing a particularly high proportion of sales in new, unfinished projects, catering to families seeking private outdoor space at a more accessible price point.

Shai Baral, Vice President of Sales at Shai Hai Group, commented that garden apartments are becoming rarer due to new construction requirements that often reduce ground-floor space for such units. Einav Cohen, Vice President of Marketing and Sales at Epi Capital, added that in peripheral areas, garden apartments are primarily a family-oriented product offering the sense of space associated with a private home at a more affordable price than in central Israel, often serving as a more manageable alternative to a detached house.