Israel's Housing Market Sees Sales Decline, Temporary Recovery Halted
Translated & summarized from Calcalist by baba
Israel's housing market saw a 5.7% drop in apartment sales in the third quarter, halting a temporary recovery. New apartment sales rose year-over-year but fell from the previous quarter, while second-hand sales declined significantly. Unsold new apartment inventory remains high at over 85,000 units, representing nearly two years of supply. Tel Aviv experienced a sharp decrease in new apartment sales.
The story in 6 lines · by baba
- Israel's housing market sales fell 5.7% in Q3, halting a temporary recovery.
- New apartment sales rose 4% year-over-year but fell 7.2% from the prior quarter.
- Second-hand apartment sales dropped 14.2% year-over-year.
- Over 85,000 new apartments remain unsold, representing 25.8 months of supply.
- Tel Aviv saw a 59.6% decrease in new apartment sales.
- Government subsidies remain crucial for new apartment sales.
Israel's housing market experienced a downturn in the third quarter of the year, halting a previous temporary recovery, according to data released by the Central Bureau of Statistics (CBS). A total of approximately 21,750 apartments were sold during the quarter, marking a 5.7% decrease compared to the previous quarter. When adjusted for seasonality, this decline was steeper at 6.8%. Year-over-year, the number of transactions fell by 7.3%, although a seasonally adjusted figure showed a slight increase of 2.6%.
The slump affected both new and second-hand housing markets, but with significant differences. New apartment sales, totaling around 9,190 units, saw a 7.2% drop from the prior quarter (12.2% seasonally adjusted). However, compared to the same quarter last year, new apartment sales actually rose by 4% (10.7% seasonally adjusted). Government-subsidized housing programs accounted for a substantial 35.7% of new apartment sales, indicating their continued importance for contractors, especially as demand in the free market struggles.
In contrast, the second-hand market showed a weaker year-over-year performance. Approximately 12,560 used apartments were sold, a 4.5% decrease from the previous quarter and a significant 14.2% drop compared to the third quarter of 2025. Even after seasonal adjustment, the year-over-year decline was 2.4%.
Trend data presents a mixed picture: an average monthly increase of 1.1% in total apartment sales since January 2026, and a 1.9% monthly rise in new apartment sales since December 2025. Conversely, the second-hand market has seen a downward trend since April 2026, with an average monthly decrease of 0.5%.
Geographically, the Southern and Central districts led in overall transactions. Kiryat Gat recorded the highest number of new apartment sales, with nearly 78.3% of them under government subsidy. Tel Aviv experienced a sharp 59.6% decline in new apartment sales, while Jerusalem and Ashdod also saw significant drops. In the second-hand market, Jerusalem, Haifa, and Beersheba led in transactions, though Tel Aviv and Petah Tikva saw decreases.
Despite the sales slowdown, the inventory of unsold new apartments remains high, standing at around 85,080 units by the end of September. This represents a supply of approximately 25.8 months at the current sales pace, with the majority of unsold units concentrated in the Tel Aviv and Central districts. Jerusalem and Tel Aviv have the largest stocks of unsold new apartments.
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