Economy21:00 · 9h ago

Israeli Developers Signal Slowdown as Building Permit Applications Plunge for 2025

YnetCenter

Translated & summarized from Ynet by baba

Key points

01Building permit applications for 2025 drop sharply in most Israeli cities, signaling developer caution.
02Haifa sees an 88% decline, Lod 79%, and Ramat Gan and Rishon Lezion 68% each in permit requests.
03Jerusalem's permit applications rise 34% despite having the highest unsold housing inventory.
04Madlan warns of potential oversupply risks, especially in Jerusalem's market reliant on foreign residents.
05Price corrections of 3-5% occur in Tel Aviv and central districts, aiding renewed demand.
06Treasury data shows a cautious market with a 3% drop in transactions and 13% fall in contractor sales in February.

In this story

People

Tal Kopel, Nadav Bariach

OrganizationsMadlan, Central Bureau of Statistics, Bee Nadlan, Treasury

PlacesHaifa, Lod, Ramat Gan, Rishon Lezion, Bnei Brak, Kfar Saba, Be'er Ya'akov, Holon

The story · English

Recent data from the Israeli Central Bureau of Statistics showed a 15% decline in building permits, but a new analysis by Madlan for Mamon and ynet reveals an even more challenging outlook. Most major cities in Israel are experiencing a sharp drop in building permit applications for 2025 compared to 2024, signaling a slowdown in developer activity. Unlike issued permits, which reflect past planning, permit applications serve as a leading indicator of current developer decisions and expected construction activity in about two years.

The data highlights severe declines in high-demand areas: Haifa saw an 88% drop to just 258 housing units requested, Lod fell 79% to 902 units, and Ramat Gan and Rishon Lezion each experienced 68% decreases. Other notable drops include Bnei Brak (65%), Kfar Saba (63%), and Be'er Ya'akov (62%). Smaller declines occurred in Holon (38%), Ashkelon (28%), Herzliya (18%), and Tel Aviv-Yafo (6%).

Jerusalem, Hadera, and Kfar Saba stand out as exceptions. Despite having the highest inventory of unsold homes in Israel (10,370 units), Jerusalem’s permit applications surged 34% to 5,832 units. Madlan warns that the combination of large unsold inventories and rising permit requests raises concerns about a potential oversupply, especially since Jerusalem’s market heavily depends on foreign residents.

Madlan CEO Tal Kopel told ynet that the decline in permit applications reflects developers’ cautious stance amid market stagnation and growing unsold housing stock. He noted that nearly all areas with significant unsold inventory are seeing fewer permit requests, except Jerusalem. Kopel added that the recent interest rate cut might revive the market and increase permit applications.

Meanwhile, price corrections are emerging in demand areas, with Tel Aviv district prices dropping about 5% and the central district about 3%. Nadav Bariach, CEO of Bee Nadlan, said price declines and financing campaigns are restoring deferred demand, as evidenced by Tel Aviv-Yafo leading new home sales with 808 units sold between December 2025 and February 2026 despite a large inventory of 85,900 new homes (about 31.7 months supply). However, Treasury data shows a cautious market overall, with total transactions down 3% and contractor sales plunging 13% in February.

Read the original at Ynet