Israel's Housing Market Cools With 85,000 Unsold New Apartments

Israel's housing market experienced a significant slowdown in the third quarter of 2026, with the total number of unsold new apartments reaching 85,080 units. The Central Bureau of Statistics reported that approximately 21,750 apartments were purchased during this period, a 5.7% decrease from the previous quarter. At the current pace of sales, it would take developers about 25.8 months to sell the existing inventory, much of which is still under construction. More than half of the unsold new homes are concentrated in the expensive central regions of the country. The Tel Aviv district leads with 31.2% of the total unsold stock (around 26,500 apartments), followed by the Central district with 24.8% (21,070 apartments). In Tel Aviv itself, demand for luxury properties is helping to mitigate a deeper market slump.

Among major cities with over 100,000 residents, Jerusalem recorded the highest volume of unsold new apartments with approximately 10,190 units, followed by Tel Aviv-Yafo with about 10,070. Smaller cities with significant unsold inventory include Kiryat Gat (3,170), Lod (3,120), Yehud-Monosson (1,590), Be'er Yaakov (1,480), Ramat HaSharon (1,440), Ra'anana (1,380), and Netivot (1,140).

Overall, 21,750 housing deals were closed between July and September, down 5.7% from the second quarter and 7.3% from the same period last year, though a 2.6% year-on-year increase was noted after seasonal adjustments. New homes accounted for 42.3% of all transactions (about 9,190 apartments), with 35.7% of these purchased under government subsidy programs like "Dira be-Anakha." The secondary market comprised 57.7% of sales (12,560 apartments), showing a gradual monthly decline since April.

Geographically, buyer demand is shifting from the expensive center towards the periphery. The Southern district led in total transaction volume with 23%, followed by the Central district with 22.1%. In the new construction segment, the Southern district also led with 26.2% of sales, while Kiryat Gat was the top city for new apartment sales, with 1,030 units sold, 78.3% of which utilized government benefits. The Central and Southern districts showed the most activity in the secondary market.