Apartment Prices Rise 1.5% in Two Months in Israel

Apartment prices rose by about 1.5% over two months, with a 0.8% increase in November–December and a 0.4% annual gain, while new apartment prices also climbed, and Tel Aviv recorded a sharp 2% jump, according to the latest data published this evening.

By Nimrod Buso, Nadlan Center

Apartment prices rise for the second consecutive month, according to the Housing Price Index published this evening (Sun.) by the Central Bureau of Statistics (CBS). Based on a comparison of transactions carried out in November–December 2025 with those carried out in October–November 2025, apartment prices rose by 0.8%. This figure follows a 0.6% increase in the previous month, after eight consecutive months of decline. Comparing transactions conducted in the current period with the corresponding period last year (November–December 2025 versus November–December 2024), apartment prices rose by 0.4%.

New apartment prices rose at a monthly rate of 0.9% (November–December 2025 compared with October–November 2025). The share of government-supported transactions (Buyer’s Price and similar programs) declined from 42.1% of total new apartment purchases in the previous period (October–November 2025) to 36.7% in the current period. The new apartment price index excluding government-supported transactions rose by 0.7%. However, in an annual comparison, new apartment prices fell by 0.9%.

By district, the sharpest monthly price increase was recorded in the Tel Aviv district, where prices surged by 2%. In the Southern district, prices rose by 1%; in the Jerusalem and Northern districts, by 0.4%; in the Haifa district, by 0.3%; and in the Central district, prices were unchanged.

Over the past 12 months, prices increased by 9.6% in the Jerusalem district, 4.8% in the Northern district, 1.4% in the Southern district, and 0.7% in the Haifa district. In the Tel Aviv district, prices declined by 1.9%, and in the Central district by 3.1%.

Compared with November–December 2024, price increases were observed in the following districts: Jerusalem (9.6%), Northern (4.8%), Southern (1.4%), and Haifa (0.7%). By contrast, price declines were recorded in the Tel Aviv (1.9%) and Central (3.1%) districts.

The CBS also published the Consumer Price Index this evening, which fell by approximately 0.3% in January 2026 compared with December 2025. Over the past 12 months (January 2026 versus January 2025), the Consumer Price Index rose by 1.8%. This figure may influence the Bank of Israel to continue lowering interest rates in its upcoming decision, expected next week.

For tenants who renewed contracts, rents increased by 2.6%, and for new tenants (apartments in the sample where there was a change of tenant), rents increased by 6%.

The Construction Cost Index for residential building rose by 0.1% in January 2026, reaching 101.3 points compared with 101.2 points in the previous month. The Construction Input Price Index excluding labor costs fell by 0.2%.

The Materials and Products Price Index fell by 0.2% in January 2026. Among materials and products, notable price declines were recorded in steel profiles (down 4.2%), marble (down 1.5%), and construction iron (down 1.4%). The Labor Cost Index paid to employees in the sector rose by 0.6% in January 2026.

Over the past 12 months (January 2026 versus January 2025), the Construction Input Price Index for residential building rose by 2.5%, due to a 5% increase in labor costs and a 0.9% increase in materials and products.

Amit Gottlieb, Chairman of the Contractors and Builders Association for the Tel Aviv and Central District, responded to the data, saying that it “indicates continued moderation of prices in the economy, with inflation at the lower bound of the target and even below it. This is a clear signal that the macroeconomic environment allows for a change in interest rate policy. High interest rates over time have become a factor weighing on real activity: expensive credit reduces investment, postpones initiatives, and deepens the slowdown. Developers refrain from purchasing land, businesses delay expansion, and households fear new commitments—not because of a lack of demand, but due to financing costs.

“When inflation moderates consistently, continued restrictive policy loses its economic justification. A significant interest rate cut will improve credit conditions, strengthen households’ repayment capacity, and encourage new investments in the economy. In the construction sector, where financing is a central component of every project, such easing will directly translate into increased supply and renewed activity. This is not a sectoral issue—this is a decision that affects the pace of the entire economy’s growth. I expect the Bank of Israel to act decisively and lower interest rates in accordance with the data, in a way that supports accelerating economic activity.”