Housing Prices to Rise 2.8% Next Year, Economist Predicts
Translated & summarized from Ice by baba
Israeli housing prices are expected to rise by 2.8% in the next year, driven by increasing rental costs and overall inflation, according to economist Yonatan Katz. This prediction follows a recent 1.8% drop in apartment prices and a slowdown in the housing market, particularly in new, non-subsidized sales. Many buyers are reportedly waiting for election outcomes, which could impact market trends. Economists foresee a potential market stagnation in 2026 before a modest recovery in 2027.
The story in 6 lines · by baba
- Housing prices are predicted to rise 2.8% in the next year, according to economist Yonatan Katz.
- Apartment prices have fallen 1.8% over the past year, indicating a market slowdown.
- New, non-subsidized apartment prices dropped 0.8% in August, the steepest decline since early 2023.
- Many buyers are reportedly waiting for election results before making purchasing decisions.
- Rental prices have increased 3.8% in renewed contracts, despite falling purchase prices.
- Economists anticipate a stagnant housing market in 2026, with a potential recovery in 2027.
Housing prices in Israel are projected to increase by 2.8% in the coming year, according to economist Yonatan Katz of Leader Capital Markets. This forecast comes despite a recent 1.8% decrease in apartment prices over the past year, as indicated by Central Bureau of Statistics data. Katz attributes the expected rise to continued upward pressure on rental prices, partly due to an increase in foreign workers, and a projected 2.3% overall inflation rate influenced by rising global agricultural commodity prices.
Recent data shows a slowdown in the housing market, with a notable weakness in new apartment sales. Approximately half of new apartments sold were part of government subsidy programs, a significant proportion. Non-subsidized new apartment prices saw a sharp 0.8% drop in August, the steepest since early 2023. Alex Zabezhinsky, Chief Economist at Meitav Investment House, suggests that many buyers are waiting for election results, which could influence purchasing decisions.
While some speculate that a government change might lead to price drops, historical data from previous government changes under Olmert and Bennett-Lapid showed price increases. Katz also noted that rental prices have risen by 3.8% in renewed contracts, despite the decline in purchase prices, a trend that typically shows a lagged correlation.
Looking ahead, some economists anticipate 2026 to be a period of stagnation, with a modest market recovery in 2027 as interest rates potentially fall to 2.75%. The overall inflation forecast also includes a 2.7% rise in food prices and fiscal adjustments expected to add 0.25 percentage points to inflation. The forecast assumes stability in the shekel's exchange rate.
Not the same event — other stories that share this one’s people, places, or theme: background, reactions, and follow-ups.