Heavy Real Estate Investors Retreat from Tel Aviv as Multi-Property Buyers Decline

A recent analysis by the Chief Economist Department of Israel's Ministry of Finance reveals a significant decline in the share of heavy real estate investors, those owning three or more properties, in Tel Aviv and other major housing markets. Until about two years ago, Tel Aviv (including Bat Yam) led with roughly one-third of investors holding multiple properties, but in the first five months of 2026, this share dropped to less than one-quarter. This decline allowed Tiberias to surpass Tel Aviv in the proportion of multi-property investors, although overall investment activity in Tiberias remains low, with about 120 investment property purchases from January to May 2026.

Haifa and its surrounding Krayot area experienced an even sharper drop, with multi-property investors' share falling from around 30% to just 16%. These trends coincide with a national surplus of approximately 84,000 unsold new apartments, particularly concentrated in Tel Aviv, Bat Yam, and Haifa. The report suggests that investors facing high purchase taxes are exercising greater caution in markets with significant developer inventory.

Despite these urban trends, data from the Israel Tax Authority shows a 17% increase over the past two years in the number of households owning five or more properties nationwide. However, this growth represents only about 1,000 additional households, a relatively small figure compared to the overall housing market size and new apartment inventory.

This investor behavior shift comes nine years after the Israeli Supreme Court struck down a law imposing a periodic tax on owners of three or more properties due to legislative procedural flaws. Although the court allowed the law's reconsideration, the process has not been completed to date.