New Apartment Sales Surge in May Driven by Financing Incentives and Large Tel Aviv Projects

In May 2026, Israel saw a notable recovery in new and second-hand apartment sales, with approximately 8,400 units sold, marking a 23% increase compared to May 2025. However, experts caution that this rise may not indicate a lasting trend but rather a temporary spike influenced by several exceptional transactions and reporting factors. Compared to April 2026, sales jumped 63%, partly due to the Passover holiday reducing working days in April.

Of the new apartments sold, 1,201 were purchased under government-subsidized programs like "Price for Residents" and its variants. The remaining 7,045 units were sold at market prices, reflecting a 17% increase from May 2025 and a 62% rise from April 2026. The surge was primarily driven by new apartment sales, which increased by 51% year-over-year and 72% compared to April, with 2,412 units sold in the free market.

Two major projects in Tel Aviv, including one by Gindi Holdings at the Sde Dov site, accounted for a significant portion of the increase. Around 700 apartments from these projects were recorded in May's tax authority data, although many contracts were signed last year and only recently converted to sales contracts after receiving building permits. This suggests much of the sales growth is technical rather than new demand.

Additionally, an increase in financing incentives contributed to the rise. Buyers could pay only 10-20% of the apartment price at signing, with the remainder due upon receiving the keys. This financing model, restricted by the Bank of Israel in March 2025, has seen a resurgence, especially in Jerusalem and the central region, where 43% and 37% of May transactions respectively used these terms.

Second-hand apartment sales also improved modestly, with 4,633 units sold in May 2026, a 7% increase from the previous year and 56% more than April 2026. Despite this recovery, about 84,000 apartments remain unsold nationwide, close to the record high from January 2026. Over half of these unsold units are in the central and Tel Aviv districts, with 9,800 unsold in Tel Aviv city alone and tens of thousands in Jerusalem.

Overall, while May's data shows a sales rebound, analysts emphasize that it is largely driven by specific projects and financing conditions rather than a broad market turnaround.