Israel’s housing market showed a measured slowdown in late summer, with home prices dipping slightly while transaction levels strengthened and the supply of new homes reached a record high. CBS data for Q3 2025 reveal modest price declines, a rebound in sales activity following a subdued June, and expanding inventory, led by major districts such as Tel Aviv and the Center. New-home demand rose sharply in areas like Sde Dov, rental prices continued to climb, and construction costs increased, offering a detailed picture of a market adjusting gradually across multiple indicators.
The Central Bureau of Statistics (CBS) has released its latest figures on Israel’s housing market, providing updated information on price movements, transaction levels, and new-home supply for August through September 2025. The data reflect a market undergoing gradual adjustment, with continued price declines, increased transaction activity, and further expansion in the inventory of unsold new homes.
Home Prices Show a Modest Decline
Home prices fell slightly in late summer. When comparing transactions from August–September 2025 to those from July–August 2025, national prices declined by 0.3 percent. Over the same period last year, prices were 0.5 percent higher. At the district level, during this period, Jerusalem and the North recorded modest increases of 0.5% 0.3%, respectively. In contrast, prices declined by 1.2 percent in Haifa, 0.3 percent in the Southern District, by 0.1 percent in the Tel Aviv District, and by 0.9 percent in the Central District.
Prices of new homes, excluding government-subsidized transactions, also moved slightly lower. Between August–September 2025 and the previous two-month period, prices of new homes fell by 0.3 percent.
While national home prices fell by 0.3 percent in the latest monthly comparison, year-over-year data shows increases in most districts, led by the North (+7.4%), Jerusalem (+6.3%), and the South (+2.3%). The Tel Aviv (-2.8%) and Central (-1.6%) Districts recorded annual declines.
Transaction Activity Increases Despite Lower Prices
Despite moderating prices, market activity strengthened. Between July and September 2025, a total of 23,330 homes were sold across Israel—15.4 percent more than in the preceding three-month period. After adjustment for Operation Rising Lion, which took place in June, the increase was 6.7 percent. Compared with the same months in 2024, however, total transactions were 12.5 percent lower.
New-home sales accounted for 8,780 transactions, representing 37.6 percent of all activity and reflecting a 23 percent increase over the previous quarter. While 436 new units were sold in Jerusalem during the quarter, a striking rise occurred in Tel Aviv–Jaffa, where 608 new homes were sold, an increase of more than 53 percent compared with the previous quarter. The CBS attributes much of this surge to the substantial release of units at Sde Dov, where large-scale construction and renewed marketing activity have driven demand higher.
Second-hand homes accounted for the remaining 14,550 transactions, up 11.2 percent over the same period. In several cities—among them Jerusalem, Haifa, Be’er Sheva, Tel Aviv–Jaffa, and Ashkelon—more than 700 second-hand homes changed hands during the quarter.
The CBS notes that September 2025 included the High Holidays and Sukkot, reducing the number of working days and contributing to lower monthly transaction totals than in previous periods. Examining the broader trend, the CBS found that while sales volumes declined at an average monthly rate of 1.2 percent between July 2024 and July 2025, the past two months showed a shift toward positive movement, with an average monthly increase of 0.6 percent. Although it is still too early to confirm a sustained trend, the figures indicate a potential stabilization in activity.
Inventory of New Homes Continues to Expand
The supply of new homes continued to grow. At the end of September 2025, there were 83,920 unsold new dwellings nationwide, an increase of 0.9 percent from August and 20.3 percent from the same month in 2024. Based on the pace of sales, this stock corresponds to 28.8 months of supply. Inventory levels were highest in the Central District, where 26,740 unsold units remained on the market, followed by the Tel Aviv District with 20,390. Among major cities, Tel Aviv–Jaffa had 10,800 new homes still available for purchase at the end of September, while Jerusalem had 8,090. The extensive construction pipeline in Sde Dov projects contributes meaningfully to this inventory, reflecting the scale of ongoing redevelopment in that area.
Average Transaction Prices Decrease
Further insight comes from average transaction values. In the second quarter of 2025, the average home price nationwide was around 2,200,000 NIS. This represents a 1.9 percent decrease from the previous quarter and a 2.5 percent decline from the second quarter of 2024. Among major cities, Tel Aviv, Herzliya, and Jerusalem all posted average prices exceeding 3 million shekels, whereas cities such as Be’er Sheva and Ashkelon remained well below that level.
Rental Market Trends Show Continued Increases
Alongside data on home prices and transactions, the CBS also reported on rental trends, showing continued rent increases nationwide. For tenants who renewed existing leases, rents rose by 2.5 percent. The increase was more pronounced among new tenants, with turnover in the rental sample resulting in an average increase of 5.5 percent. These figures reflect ongoing demand pressures in the rental market, even as purchase prices have moderated during recent months.
Construction Costs Continue to Rise
The CBS also published updated figures for the residential Construction Cost Index, which measures changes in the cost of building materials and labor. In October 2025, the index increased by 0.1 percent compared with the previous month. Since the beginning of the year, construction input costs have risen by 4.3 percent, and over the past twelve months, they have increased by 5 percent. The rise is driven primarily by a 9.2 percent increase in labor costs and a 2 percent increase in the cost of materials and products used in residential construction. These shifts influence developers’ cost structures and may affect construction timelines, building costs, and the economics of new projects over time.
The Buyitinisrael Editorial team is made up of industry experts, journalists, researchers, editors, and translators working together to deliver reliable, up-to-date information about the Israeli property market — all in English. With a strong focus on transparency and accessibility, our goal is to empower English-speaking buyers by helping them understand the market and navigate the real estate process with clarity and confidence.
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