Home prices in Israel fell in May and June for the fourth month in a row, as sales data reflected the impact of Israel’s 12-day war with Iran for the first time.

The housing market has cooled in recent months, partially in reaction to the multiple wars Israel has been engaged in since Hamas invaded southern Israel on October 7, 2023. Prices have fallen by 1.3% in the last four months.

Prices dropped 0.5% in May–June compared to April–May, according to the most recent information available from the Central Bureau of Statistics. That was the biggest monthly drop since January 2024.

Despite the short-term drops, prices have actually risen 2.5% compared to the same period a year ago. Earlier this year, the market’s annual growth had peaked at 7.8%.

Prices during the two-month period rose by 0.7% in Haifa, 0.4% in the north, and 0.1% in the south. They fell by 1.3% in Tel Aviv, 0.9% in the central district, and 0.1% in Jerusalem.

The price of newly built homes fell by 1.5% compared to the previous two-month period, the CBS said.

According to Finance Ministry data for June, a total of 5,844 apartments were sold, the lowest level recorded in the past months and a 29% drop from a year earlier.

New apartment sales, including government-subsidized units, declined by 46% from June 2024 to 1,954 units. For new apartments in the free market, sales were 1,441, a sharp 50% decline compared to June last year. Secondhand apartment sales reached 3,890 units, a decrease of 16% compared to June 2024.

Investors purchased only 847 apartments in June, a 36% decrease compared to June 2024. Investors sold 1,103 apartments, a 24% decrease compared to June 2024.

Besides the war, new Bank of Israel restrictions on financing benefits offered by contractors, which came into effect at the end of March, appear to be a significant factor in the decline of new apartment sales, the Finance Ministry said. These restrictions apply to projects where a significant portion of the price is deferred until delivery, making such financing more expensive for contractors.

However, Bank Hapoalim economists mentioned in a note to investors, the fact that........

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