For the Sixth Time in a Row: Israel Home Prices Fall 0.6% in July–August

Apartment prices in Israel continued to decline for the sixth consecutive month, according to the Central Bureau of Statistics (CBS). The latest Housing Price Index, comparing transactions made in July–August 2025 with those in June–July 2025, shows a 0.6% decrease in prices.

By Doron Breutman, Nadlan Center

Prices of new apartments fell by about 1.2% during the same period; however, when excluding roughly 40% of transactions that were part of government-supported programs, the drop was a more moderate 0.2%. The ceasefire agreement with Hamas, which included the release of all remaining living hostages this week, is not reflected in the CBS data covering July–August, and it remains to be seen how, if at all, this will impact the housing market.

Over the past 12 months (July–August 2025 compared with July–August 2024), apartment prices have risen by 0.7%, while new-apartment prices have increased by 0.5%.

Breaking down by region, the July–August 2025 data show the following price changes: Jerusalem (+1.0%), North (–0.2%), Haifa (–0.4%), Center (–1.8%), Tel Aviv (–0.9%), and South (–0.8%). Comparing the same period year-over-year, prices rose in the North (+8.4%), Jerusalem (+4.2%), Haifa (+3.7%), and South (+2.8%), while declines were recorded in the Center (–2.9%) and Tel Aviv (–1.5%).

The Construction Cost Index for residential buildings remained unchanged in September 2025. Since the beginning of the year, the index has risen by 4.2%. Excluding labor costs, the index fell by 0.1%. Over the past 12 months (September 2025 vs. September 2024), it increased by 5.1%, driven by a 9.3% rise in labor costs and a 2.1% increase in materials and products. In September alone, material prices declined by 0.2%, while wages in the construction sector rose by 0.2%.

Rent prices continued to rise: among tenants renewing contracts, rents increased by 2.6%, while new tenants (where turnover occurred) faced an average increase of 5.3%.

Meanwhile, the Consumer Price Index (CPI) fell by 0.6% in September 2025 compared with August 2025. Over the past year, the CPI rose by 2.5%. The most notable declines were seen in fresh fruit (–3.2%), culture and entertainment (–2.4%), transportation and communications (–2.2%), food (–0.5%), clothing and footwear (–0.3%), and housing services (–0.2%). On the other hand, notable increases were recorded in fresh vegetables (+3.5%), rent (+0.3%), and healthcare (+0.3%).