Home Prices in Israel Falling for Fifth Straight Month

Home prices in Israel continued to decline for the fifth consecutive month, according to the Housing Price Index published Monday evening by the Central Bureau of Statistics (CBS). The data, comparing transactions from June–July 2025 to May–June 2025, shows a 0.2% drop in overall home prices. New apartment prices fell more sharply, by about 0.8% during the period. However, excluding 33% of subsidized government-supported deals, the decrease was a more moderate 0.3%.

By Nimrod Bosu, Nadlan Center

Over the past 12 months (June–July 2025 compared to June–July 2024), home prices still registered an annual increase of 1.6%, with new apartments rising by 2.7%.

Regionally, in June–July 2025, prices fell in Jerusalem (-0.1%), the Central District (-0.9%), and Tel Aviv (-0.2%), while increases were recorded in the North (0.4%), Haifa (0.8%), and the South (0.4%). On a year-over-year basis, the strongest gains were seen in the North (9.1%), Haifa (5.9%), the South (2.3%), and Jerusalem (1.9%). By contrast, prices declined in the Central District (-1.1%) and Tel Aviv (-0.3%).

In contrast to housing prices, the Consumer Price Index (CPI) jumped 0.7% in August 2025 compared to July, bringing inflation over the past 12 months to 2.9%.

Rental costs also rose. Renewed leases increased 2.7%, while new tenants faced an average hike of 5.5%.

Construction input costs continued to climb. The Residential Construction Input Index increased 0.4% in August 2025 to 100.4 points (base: July 2025 = 100), representing a 4.2% rise since the start of the year and a 5.5% increase over the past 12 months. This surge reflects a 9.7% rise in labor costs and a 2.5% increase in materials and products. Specific material price hikes included ready-mix concrete (3.2%), mortar and plaster (2.3%), blocks (2.2%), iron frameworks (2.0%), and quarry materials and transport (1.4%). At the same time, prices of construction steel (-3.2%), rebar mesh and cages (-2.5%), and elevators (-1.0%) dropped.

The Israel Land Authority (ILA) welcomed the continued decline in home prices, stating: “The Housing Price Index published this evening clearly indicates that the supply-expansion policy we have pursued in recent years is having its impact on the housing market. What began in Sde Dov as a domino effect continues to influence the entire market. We believe this trend will persist and deepen in the coming months. For the first time in a long while, the power in the housing market lies with buyers — an important development for young couples and the housing-deprived. At the same time, our teams are working vigorously to market additional land nationwide, alongside expanding subsidized housing programs such as ‘Apartment at a Discount’ and ‘Apartment for Rent.’”