New Home Sales Surge 888% in Third Quarter, Led by Kiryat Gat

Israel's real estate market saw a notable surge in new apartment sales in the third quarter of 2026, despite an overall decline in transaction volume. Data from the Central Bureau of Statistics (CBS) revealed that approximately 9,190 new apartments were sold between July and September, a 7.2% decrease from the previous quarter but a 4% increase compared to the same period in 2025. The market is characterized by a large inventory of unsold new apartments, standing at around 85,080 units by the end of September, a figure that has been trending upwards since January 2019. At the current sales pace, it would take over two years to sell all available units.

More than a third of new apartments sold, about 3,280 units, were part of government subsidy programs, indicating a significant portion of the market relies on these incentives. In contrast, sales of second-hand apartments experienced a sharper decline, with 12,560 units sold in the third quarter, a 4.5% drop from the previous quarter and a 14.2% decrease year-on-year. This disparity is partly attributed to contractors offering attractive financing deals for new homes, allowing buyers to defer payments, a benefit not typically available in the second-hand market.

While Tel Aviv saw a dramatic 59.6% drop in new apartment sales, Kiryat Gat emerged as a surprising leader, with sales jumping 121.5% to 1,030 units. However, a significant 78.3% of these sales in Kiryat Gat were under government subsidies. Other cities also reported substantial increases in new home sales, including Haifa (up 16.8%) and Petah Tikva (up 69.2%). Conversely, Jerusalem experienced a 27.7% decrease, and Ashdod saw a sharp 69% decline.

Particularly striking were the percentage increases in smaller localities: Tirat Carmel recorded an 888.2% rise in new apartment sales, Rakefet saw a 531% increase, and Acre reported a 302.9% jump. Regionally, the Southern district led new apartment sales with 26.2% of all transactions, followed by the Central district (20.3%) and Haifa (16%). The Tel Aviv district, however, experienced a 43% decrease in new home sales.

The inventory of unsold new apartments remains historically high, with the Tel Aviv and Central districts holding the largest share, accounting for 56% of the national total. Tel Aviv-Yafo and Jerusalem have the highest number of unsold units in absolute terms, with over 10,000 each.