Home Prices in Israel See Sharpest Drop Since 2023

Home prices in Israel recorded another steep drop, with a further 0.5% drop according to the Israel Central Bureau of Statistics’ Housing Price Index published this evening (Monday). This marks the eighth consecutive monthly decrease in apartment prices, with a cumulative decline of 2.7% between February 2025 and this past October. Prices have now returned to their levels from one year ago. At the same time, the Construction Cost Index registered a notable rise of 0.6%. The Director-General of the Israel Land Authority, Yanki Quint, who is set to conclude his term in two weeks, praised the development: “We succeeded in addressing the pricing problem.”

By Nimrod Buso, Nadlan Center

Home prices fell by an additional half percent during September–October 2025, according to the Housing Price Index published this evening (Monday) by the Central Bureau of Statistics (CBS). This is the eighth consecutive month in which the CBS index shows a decline in apartment prices. Between February 2025 and this past October, apartment prices dropped cumulatively by 2.7%. This monthly fall is also the sharpest in nearly two years, since the October–November 2023 index, which similarly showed a 0.5% decrease in the aftermath of the events of October 7 and the start of the Iron Swords War.

However, a comparison of apartment prices in September–October 2025 to the same months last year shows that apartment prices did not fall on an annual basis, remaining roughly unchanged with a minimal increase of 0.1%. This is due to relatively sharp rises in the index between October 2024 and February 2025.

A regional breakdown shows that when comparing September–October 2025 to August–September 2025, prices in the Jerusalem district increased by 1.4%, while all five other districts saw declines. Prices dropped 2.1% in the South, 1.1% in Tel Aviv, and also fell in the North (0.2%-), Haifa (0.6%-), and the Center (0.4%-).

Annual price changes by district (September–October 2025 compared with September–October 2024) show increases in Jerusalem (8.9%), the North (5.5%), Haifa (1.2%), and the South (0.5%), while declines were recorded in Tel Aviv (-2.9%) and the Center (-2.7%).

A comparison of transactions completed in September–October 2025 with those in August–September 2025 indicates that new-apartment prices fell by 1.4%. The share of subsidized government transactions rose from 36.8% to 44.2%. However, the Housing Price Index for new apartments excluding subsidized sales fell by only 0.2%. Over the full year (September–October 2025 compared to September–October 2024), new-apartment prices declined by 2%.

Following the CBS publication, Israel Land Authority Director-General Yanki Quint, who will conclude his term at the end of the month, issued a celebratory statement: “The eighth consecutive decline in housing prices is a clear and powerful signal to the public—we succeeded in addressing the pricing problem. This crisis, which has accompanied the country for decades, is now in a clear and encouraging process of contraction. None of this could have happened without the land-supply expansion policy of the Israel Land Authority. We have been aggressively marketing land across the country in close cooperation with all relevant entities, and in the coming two weeks, tenders for tens of thousands of additional housing units will close. Over the past five years, we have marketed more than 500,000 housing units and signed deals for over 300,000 units. We have proven that no problem is unsolvable, even if the process is long and gradual.”

Quint added: “On a personal note, I take the greatest satisfaction in meeting the goal I set when entering the role five years ago. Reducing apartment prices was then considered unrealistic, even absurd. But through extensive work and persistence, and by setting short- and long-term targets, the employees of the Israel Land Authority delivered a true and important achievement for the people of Israel, especially the younger generation. Yes, the work is not yet finished. This trend must continue until housing in Israel becomes accessible to much broader segments of the population. I am confident that whoever follows me will continue along the path already paved. If you will it, it is no dream.”

The Consumer Price Index dropped by 0.5% in November 2025 compared with October 2025. Over the past 12 months (November 2025 versus November 2024), the index rose by 2.4%.

In the rental market, tenants renewing a lease saw a 2.8% increase, while new tenants (in sampled apartments where renters changed) experienced a 4.7% rise.

The Construction Cost Index for residential building rose by 0.6% in November 2025, reaching 101.1 points compared with 100.5 points in the previous month (base: July 2025 = 100.0 points). Since the start of the year, this index has risen by 5%. Over the past 12 months (November 2025 vs. November 2024), the index climbed 5.3%, driven by a 9.1% increase in labor costs and a 2.6% rise in materials and products.

The Materials and Products Index rose by 0.9% in November 2025. Among the materials that recorded notable increases were delivered concrete (up 6.3%), mortar and plaster (up 5.3%), and protected-space products (up 1.6%). The labor-cost index for employees in the sector rose by 0.4% in November 2025.