Home prices in Israel recorded their largest monthly decline in eight years in April and May 2026, falling by 1% compared to the previous two-month period, according to the most recent report released by the country’s Central Bureau of Statistics.

Market prices have fallen an average of 2% compared to the same period a year earlier, marking one of the few sustained annual declines in the past decade, the CBS says. Prices have declined in nine out of the last 12 months.

Israel’s housing market has slowed over the past year, partly in reaction to the multifront war Israel has been engaged in since Hamas invaded southern Israel on October 7, 2023. High interest rates, a record supply of unsold new housing, and high prices have also helped to tamp down sales. The shekel’s strength against the dollar, currently at NIS 3.06, is also affecting demand from overseas buyers.

The Israeli currency is about 10% stronger than it was a year ago, and has fluctuated by more than 20% over the past 16 months, trading data shows. The strength of the shekel means that while interest from foreign buyers is still high, their dollars, pounds and euros don’t go as far as they used to, with the cost of homes rising by hundreds of thousands in some cases when exchanging currencies.

The decline also follows market uncertainties regarding the US-Israeli war with Iran, which began on February 28.

During April and May, prices declined by 2.3% in Tel Aviv, 1.8% in Jerusalem, 0.5% in Haifa, and 0.3% in the north. They were unchanged in the central district and the south.

Compared with the same period last year, prices have climbed 1.4% in the north and 0.3% in Jerusalem. Prices fell by 3.2% in the central district, 2.6% in Haifa, 2.5% in Tel Aviv, and 0.5% in the south.

According to Finance Ministry data for May, a total of 8,246 apartments were sold, a 23% increase compared to May 2025. Transactions rose 63% compared to the previous month.

The sharp monthly surge was largely attributed to the exceptionally low activity in April, which had fewer working days due to the Passover holiday.

New apartment sales, including subsidized units, totaled 3,613 in May, up 51% from May 2025. A total of 4,633 secondhand apartments were sold, a 7% increase compared to last year.

Investor activity increased........

© The Times of Israel