Israeli Housing Prices Expected to Rise 2.8% Next Year
Translated & summarized from Ice by baba
Israeli housing prices are expected to rise by 2.8% in the next year, according to economist Yonatan Katz, despite a recent 1.8% decline. This projection is influenced by rising rental costs and anticipated inflation of 2.3%. While some economists predict market stagnation in 2026, others see a potential recovery. Buyer behavior may also be affected by upcoming election results.
The story in 5 lines · by baba
- Housing prices in Israel are predicted to increase by 2.8% in the upcoming year.
- Rental prices have risen 3.8% in renewed contracts, despite a 1.8% drop in purchase prices.
- Overall inflation is forecast at 2.3%, with food prices expected to rise 2.7%.
- A significant portion of new apartments are being sold under government subsidy programs.
- Some buyers are reportedly waiting for election results before making purchase decisions.
Housing prices in Israel are projected to increase by 2.8% in the coming year, driven by continued upward pressure on rental costs, according to economist Yonatan Katz of Leader Capital Markets. This forecast comes despite a recent 1.8% decrease in housing prices over the past year, as reported by the Central Bureau of Statistics. Katz noted that rental prices have risen 3.8% in renewed contracts, even as purchase prices have fallen, attributing this to factors including an increase in foreign workers.
Economists are divided on the market's short-term trajectory. Some anticipate a "stagnation year" in 2026, with a modest recovery in 2027 as interest rates potentially fall to 2.75%. Alex Zabrzinski, chief economist at Meitav Investment House, highlighted the ongoing stagnation in housing sales, with a significant portion of new apartments sold under government subsidy programs. He observed a sharp 0.8% drop in August for non-subsidized new apartments, the steepest decline since early 2023, suggesting that many buyers are awaiting election results.
Katz also forecasts overall inflation of 2.3% for the next year, influenced by a 2.7% rise in food prices due to global agricultural commodity costs. He further anticipates fiscal adjustments, including the potential return of fuel excise taxes to previous levels, to add at least 0.25 percentage points to inflation. The forecast assumes stability in the shekel's exchange rate.
