At the end of the year, prices fell, but only a little (about 0.1%). Different regions moved in different directions. Prices kept rising in Tel Aviv, dropped in the central region, and also went down in Jerusalem after rising for a few months.

Where did prices fall the most?

Even though Tel Aviv had a short period of rising prices, it still ended the year down about 3%. The central region dropped even more, around 4%.

On the other hand, some areas saw price increases. Jerusalem led with a 5.4% rise, followed by the north (about 3%), and smaller increases in the south and Haifa.

One reason is supply. Tel Aviv and the central region have over half of the new apartments available, giving buyers more power and pushing prices down.

Jerusalem is different. Many expensive homes were bought there, especially by foreign buyers since the war started. These high-end purchases pushed prices up more than usual.

Which homes dropped in price?

Most of the price drops came from second-hand (resale) apartments. New apartment prices officially dropped by 2.7%, but this includes government-subsidized housing, which lowers the average. If you remove those, prices for new homes actually went up by about 1%.

Why are prices rising if developers can’t sell?

Developers are offering deals like paying 20% now and 80% later. These deals can make prices look lower, but in reality, developers are often charging higher prices through these offers.

What about renters?

Rent is still going up. New renters or people who moved recently are paying about 5.8% more on average. Those who stay in their current place and renew their lease pay a smaller increase, around 2.7%.

Impact on inflation

Housing costs are still pushing inflation higher. Even though overall prices slightly dropped at the start of 2026, housing, especially rent, keeps the overall cost of living up.

Source: Adapted from an article by Arik Mirovsky, published in Globes (March 16, 2026).  https://en.globes.co.il/en/article-home-prices-fell-09-in-2025-1001537686