The “City of Real Estate” conference in Eilat, hosted by Nadlan Center in March 2025, brought together key players in Israel’s property sector to discuss the most pressing issues in the market. Major topics included transportation and infrastructure developments, the acceleration of urban renewal projects, and efforts to bridge the regional gap between the north and south. Experts also examined long-term rental solutions, the impact of the war on real estate, and rising property prices, with policymakers debating regulatory reforms and taxation policies. The event highlighted the challenges ahead and underscored opportunities for strategic planning, investment, and policy interventions to ensure a stable and thriving real estate sector in Israel.
This week, the annual “City of Real Estate” conference, hosted by the Nadlan Center in Eilat, brought together key players in Israel’s property sector, including developers, investors, policymakers, and urban planners. Against the backdrop of ongoing economic and geopolitical challenges, the event provided a crucial platform for discussions on the future of Israel’s real estate market. The following is a summary of some of the key topics discussed at the conference:
Urban Renewal: The Future of Housing Supply
Urban renewal, particularly in aging neighborhoods, emerged as a major theme at the conference. As urban centers struggle with old infrastructure and lack available land for new developments, renewal projects provide a crucial avenue for expansion and modernization. Accelerating Pinui-Binui projects and new urban renewal frameworks to replace Tama 38 was emphasized to increase housing supply, modernize infrastructure, and improve earthquake resilience. Panelists also discussed the need for policy adjustments to make these projects more financially viable, including improved compensation for residents, streamlined approval processes, and greater cooperation between developers and local authorities. Additionally, concerns were raised about the bureaucratic hurdles that often delay projects, with suggestions for clearer zoning regulations and faster municipal approvals to ensure efficient execution.
Transportation and Infrastructure: A Key to Growth
The role of transportation in shaping Israel’s real estate landscape emerged as another pressing topic. Improved connectivity is expected to drive growth in suburban and peripheral areas, easing the burden on high-demand urban centers. A significant focus was placed on the Tel Aviv metro project, which is expected to transform connectivity across the metropolitan area. Experts discussed the anticipated impact of the metro on housing demand, property values, and urban expansion, particularly in areas that will benefit from improved accessibility. While the metro is seen as a long-term game changer, concerns were raised about delays in construction, regulatory challenges, and funding obstacles.
Long-Term Rentals: An Alternative to Homeownership?
As home prices continue to rise, industry leaders highlighted the need for dedicated land allocations and incentives to encourage large-scale rental developments as a potential solution for affordability. Urban planners emphasized that a strong rental market is essential for retaining young professionals, while policymakers and developers explored strategies to boost institutional rental projects, ensuring tenants have access to stable, well-maintained housing. Proposed measures included tax benefits for developers, regulatory adjustments to facilitate large-scale rental projects, and government-backed programs to expand supply in high-demand areas.
However, challenges remain. Regulatory uncertainties and taxation policies continue to hinder the sector’s growth, and industry leaders stressed that without significant government incentives, making these projects financially viable will be difficult.
Rising Prices and Market Outlook
A dominant concern at the conference was the continued rise in property prices. Despite government efforts to curb inflation, housing remains unaffordable for many Israelis. High-interest rates, supply shortages, and speculative investments have all contributed to market pressures. Experts debated potential policy interventions, including increased land allocations, improved planning efficiency, and financial incentives for first-time buyers. Some policymakers committed to accelerating land rezoning processes and simplifying permitting procedures to facilitate new construction. However, there were differing opinions on the effectiveness of financial incentives, with some arguing that subsidies could exacerbate demand-driven price increases rather than improve affordability.
On the other hand, Israel Land Authority (ILA) Director, Yanki Quint, expressed confidence that prices could decline, suggesting that current high costs are partly driven by developers framing a market crisis to justify increases. He emphasized the expansion of the “Target Price” program to reduce land costs and highlighted the need for greater government support for long-term rental projects. Additionally, he addressed challenges in urban renewal, particularly the allocation of supplementary lands and bureaucratic hurdles in collaboration with the Ministry of Finance.
Assaf Simon, CEO of BST, pointed out that the housing supply currently exceeds demand, with over 70,000 unsold units, suggesting no immediate housing shortage. He noted that financing benefits currently translate to an 8-10% discount, but cautioned that bureaucratic delays—such as the three-year process to obtain building permits—could drive future price hikes.
These discussions highlight the complexities of Israel’s housing market, with differing perspectives on pricing trends, supply and demand dynamics, and the role of bureaucracy in shaping future housing costs.
The Impact of the War on Real Estate
With Israel’s security situation in flux, the real estate market is grappling with the effects of ongoing conflicts. The war has disrupted construction timelines, increased costs for materials and labor, and influenced buyer sentiment. In some areas, particularly those near conflict zones, there is a growing need for resilient housing solutions and security-enhanced developments. Meanwhile, demand has shifted towards central and northern regions, where buyers seek more stable environments, impacting pricing trends and investment priorities in these areas.
Bridging the Gap Between North and South
A key theme at the conference was the need for balanced regional development beyond central Israel. While Tel Aviv remains the country’s primary investment hub, panelists emphasized emerging opportunities in the north and south. The Negev and Galilee are receiving increased government support for housing and commercial projects, yet challenges such as limited employment opportunities and underdeveloped infrastructure continue to hinder large-scale migration.
Despite economic uncertainty, developers remain optimistic. Strong sales in cities like Ofakim, Ma’alot, and Tiberias—even in the aftermath of recent conflicts—indicate sustained demand. Industry leaders underscored the importance of streamlining regulations to enable large-scale projects in cities such as Nahariya and Metula. Additionally, fluctuating interest rates were identified as a critical factor shaping investment decisions and regional expansion efforts. With the right incentives and policy adjustments, these regions could become viable alternatives to the high-demand center, fostering a more balanced and sustainable real estate landscape across Israel.
Looking Ahead
As the conference in Eilat concluded, it was clear that while challenges persist, there is strong momentum toward innovative solutions. The real estate industry, in collaboration with government bodies, must work to improve housing accessibility, enhance infrastructure, and create sustainable growth models. The discussions underscored the importance of long-term planning and adaptability in an ever-changing market. With pressing issues such as transportation, regional development, and housing affordability at the forefront, stakeholders must continue to seek strategic reforms that ensure a resilient and thriving real estate sector in Israel.
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