Israel's Housing Market Sees Sharp Decline in September Sales
Translated & summarized from Calcalist by baba
Israel's housing market experienced a significant downturn in September, with apartment sales dropping 10% year-over-year and 17% from August. Developers sold fewer new apartments, especially in Tel Aviv, while second-hand sales also declined. Developers are increasingly offering financing incentives, reaching 45% of new apartment sales, the highest since March 2025, to combat the slump and its impact on their cash flow.
The story in 5 lines · by baba
- September apartment sales in Israel fell 10% year-over-year and 17% from August.
- Developer sales of new apartments dropped 20.6% from August, with Tel Aviv seeing a 34% decline.
- Financing incentives were used in 45% of free-market new apartment sales, the highest since March 2025.
- Second-hand apartment sales decreased 16% from last September and 14% from August.
- Developers' cash flow severely impacted, with revenue after expenses down 45% year-over-year.
Israel's housing market continues to stagnate, with September sales plummeting to levels not seen in years, according to a new report from the Ministry of Finance's chief economist. The data, which analyzes September transactions based on Israel Tax Authority records, indicates that only September 2002, 2018, and 2023 saw fewer deals than the current year.
Overall, 10% fewer apartments were sold in September compared to the same month last year and 17% fewer than in August. Developers sold 2,669 new apartments, a 20.6% drop from August, with the Tel Aviv area experiencing a particularly sharp 34% decrease in developer sales compared to August. Approximately 870 of these new apartments were sold under government housing programs, meaning only about 1,800 were sold at market price.
Second-hand apartment sales also fell, down 16% from last September and 14% from August, totaling 3,577 transactions. In response to these difficulties, developers have reintroduced significant financing incentives, allowing buyers to pay as little as 20% of the apartment's price upon signing the contract and the remainder upon delivery.
These financing benefits were utilized in 45% of free-market new apartment sales in September, up from 30% in August, marking the highest rate since March 2025, before new restrictions were imposed by the Bank of Israel. The Beer Sheva region saw financing deals jump from 22% to 58%, Tel Aviv from 21% to 34%, and Hadera recorded the highest rate at 74%.
The Ministry of Finance estimates these incentives helped maintain developer sales in the free market at levels similar to last September. However, the sharp decline in sales has severely impacted developers' cash flow. Actual revenue from apartment sales before deducting expenses fell by a real 5% compared to last September, to NIS 5.2 billion. After deducting expenses, developers were left with only NIS 338 million, a 45% decrease from the previous year.