Israel's home market is shrinking by about 3% per month, and real estate developers are finding it increasingly difficult to sell new apartments. Data from the Central Bureau of Statistics published today indicate that the stock of new apartments for sale has reached almost 83,000, and at the rate of sales, it will take developers 31 months to get rid of them all.
According to the data, between May and July 2025, about 21,640 apartments were sold, down about 20% from the corresponding period last year.
This is not only a sharp fall, but also a significant change in the mix of apartments sold, since if the apartments sold as part of the government subsidized home sales program are deducted, and only homes sold on the free market are taken into account, the percentage of new apartments in the total market was only 28% in recent months, while only 18 months ago the percentage was higher than 40%.
In other words, if buyers greatly increased demand for new apartments since the start of the war until the end of 2024, since the start of 2025, there has been a return to the situation three years ago. All this in a market that is in decline, meaning that there is also a fall in the number of deals in second-hand apartments. Overall, both in new homes and in second-hand homes, the trend is of a monthly fall of about 3% in the number of deals, which does not bode well for the market.
Ofakim leads new homes sales
These are not the only changes. There are also changes in the geographical location of purchases. Ofakim leads the table for the purchase of new apartments with 535 apartments sold in the Negev city between May and July 2025, compared with 516 apartments sold in Tel Aviv and 356 in Jerusalem. Lod, Netivot and Elad are also high up on the list for new apartment sales.
Overall, these are low numbers even for the leading cities, but they are still indicative that today the most important factor in residential real estate is the price of the apartment. In expensive places, it is more difficult to sell apartments.
As a result, the supply of apartments is rising and approaching 83,000 new unsold apartments. This is a record that is broken every month, which stems from gaps between relatively high building starts for the period, compared with low sales.
Tel Aviv is the city with the biggest supply - one in eight new unsold apartments are located in the city, followed by Jerusalem, which has about 8,000 new unsold apartments, Bat Yam with 4,300, and Netanya with about 3,900 unsold apartments.
Published by Globes, Israel business news - en.globes.co.il - on September 14, 2025.
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