Israel Real Estate Market Analysis

The 2025 numbers are in, and the story they tell isn't the dramatic one that makes headlines. It's a subtler shift, the kind that rewards buyers who read the data rather than the mood. Here is what actually happened last year, laid out plainly, and what it means if you're looking to buy.

The national picture

Roughly 90,700 apartments changed hands in Israel in 2025, about 12% fewer than in 2024. The sharper move was in new construction: only around 34,000 new apartments sold, a 25% drop year over year. So the slowdown wasn't spread evenly. It landed hardest on the new-build market, while the second-hand market held remarkably steady.

Source: Israel Central Bureau of Statistics, via Calcalist & Ynet.

Buyers are quietly choosing second-hand

Look at the three-year trend and the shift is clear. New apartment sales ran at roughly 45,000 in 2023, 46,000 in 2024, then fell to about 34,000 in 2025. Second-hand sales, over the same period, barely moved: around 58,000, then 57,000, then 56,700. Where new-build volume dropped by a quarter, the resale market lost almost nothing.

By the fourth quarter of 2025, second-hand apartments made up about 60% of all sales, with new apartments at roughly 40%. And of those new-apartment sales, about a third, 33.9%, went through government-subsidized programs like Mechir LaMishtaken (מחיר למשתכן). Strip out the subsidized deals and the free-market appetite for new construction was thinner still.

Where the activity was, and wasn't

For new apartments, the traditional leaders cooled. Tel Aviv led but fell from about 3,110 sales in 2024 to 2,372 in 2025; Jerusalem dropped from 2,957 to 1,911; Ofakim held roughly flat, 2,013 to 1,926.

The second-hand map looked far more stable. Jerusalem (3,833 to 3,727), Haifa (3,932 to 3,632) and Be'er Sheva (3,401 to 2,961) all stayed close to their prior-year volumes, more evidence that resale demand is where the market's floor is.

And the slowdown wasn't universal. A handful of cities actually grew their new-apartment sales in 2025: Be'er Ya'akov (+59.8%), Herzliya (+49.7%), Nof HaGalil (+36.5%), El'ad (+17.2%) and Sderot (+1.9%). Local supply, pricing and new project launches matter as much as the national trend.

The number underneath it all: inventory

The single most important figure isn't a sales number, it's the stockpile. Israel ended the period with about 86,090 unsold new apartments. Roughly 10,230 of those sit in Jerusalem and 9,710 in Tel Aviv, with the heaviest concentration of unsold units across the Tel Aviv and Central Districts.

That overhang is what's really driving developer behavior right now, and it's why buyers are seeing more flexibility than they have in years.

What this means if you're buying

Three things follow directly from an oversupplied new-build market. Developers have more inventory they need to move. Discounts and incentives are more common than they were. And second-hand apartments, never part of the glut, remain genuinely competitive on price.

This is not a market crash. It's a market where the buyer who understands supply can negotiate a better deal. Read the inventory, know which cities are soft and which are tightening, and the numbers stop being a headline and start being leverage.

Navigating the Israeli market can be challenging, and knowing it well is essential in today's economy. If you'd like to talk through what this data means for a specific city or property, in your budget, with the real comparables, reach out to us at office@gabairealestate.com.

Disclaimer: The information in this article is provided for general informational purposes only and does not constitute legal, financial, tax, investment, or other professional advice. Gabai Real Estate makes no representation or warranty as to the accuracy, completeness, or timeliness of any information provided and accepts no responsibility or liability for any loss, damage, or decision arising from reliance on it. Laws, regulations, taxes, and market conditions change frequently and vary by individual circumstance. Anyone seeking accurate, up-to-date guidance should consult a licensed attorney, accountant, or other qualified professional regarding their specific situation. Any use of or reliance on this information is solely at your own risk.