Israel’s Housing Market Shows High Inventory but Prices Remain Stable Due to Limited Immediate Supply

Real estate developer Dvir Dimri provided an in-depth analysis of Israel’s housing market in a quarterly review for the third quarter of 2026. Despite reports of 84,000 unsold apartments available nationwide, prices have not fallen significantly, with average housing prices only decreasing by 3.7% according to the Central Bureau of Statistics. Dimri explains that the key issue is not the total number of apartments listed but how many are truly available for immediate purchase and delivery.

Dimri revealed that about 70% of the reported inventory is concentrated in three expensive regions: Tel Aviv (30%), the Central District (24%), and Jerusalem (15%). Many of these apartments are priced between three to twenty million shekels, making them inaccessible for many young couples and families. Additionally, tens of thousands of these units are not intended for sale but are allocated for long-term rental, discounted housing programs, or are part of urban renewal projects where units return to original owners. Only 16,000 to 25,000 apartments are ready for immediate delivery, while approximately 70,000 are scheduled for delivery more than two years from now, with some not yet marketed.

A major concern highlighted by Dimri is the sharp decline in land tenders issued by the Israel Land Authority (ILA). In the first half of 2026, developers won tenders for only about 7,600 housing units, generating 2.83 billion shekels for the state, a significant drop compared to previous periods. Nearly 44% of ILA tenders failed this year due to planning and infrastructure issues, which could lead to a housing shortage toward the end of the decade given the long lead times from land tender to apartment delivery.

Dimri also pointed to long-term demographic trends, citing Central Bureau of Statistics projections that Israel’s population will reach around 14 million by 2040 and continue growing thereafter. This population increase will sustain housing demand even during periods of price stabilization. He concluded that the Israeli housing market should be viewed as a collection of micro-markets rather than a single national market. Prospective buyers should evaluate each deal individually, considering location, price, delivery timing, financing conditions, and personal strategy rather than relying on broad headlines about the total number of apartments on the market.