Home prices in Israel fell in August and September for the seventh consecutive time, the market’s longest decline since 2018.

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. High interest rates, a record supply of unsold new housing, and high prices have also helped to tamp down sales. Prices have fallen by more than 2% in the last six months.

On Monday, the Bank of Israel gave a little boost to the market as it cut borrowing costs for the first time in almost two years, lowering interest rates by 25 basis points to 4.25% from 4.5%.

However, the shekel’s strength against the dollar makes it harder for overseas buyers to purchase Israeli properties. The dollar reached a low at NIS 3.25 last week, an exchange rate not seen since April 2022.

Prices dropped 0.3% in August-September compared to July-August, according to the most recent information available from the Central Bureau of Statistics.

Home prices have risen only 0.5% over the past year, representing a “noticeable cooling” of the market, CBS said. Earlier this year, the market’s annual growth had peaked at 7.8%.

During the past month, prices rose by 0.5% in Jerusalem and 0.3% in the north. They fell by 1.2% in Haifa, 0.9% in the central district, 0.3% in the south, and 0.1% in Tel Aviv. New home sale prices countrywide dropped an average 0.8%.

In comparison with prices a year ago, prices have risen 7.4% in the north, 6.3% in Jerusalem, 2.3% in the south, and 1.7% in Haifa. Prices have fallen 2.8% in the central district and 1.6% in Tel Aviv, CBS said.

The average price of an apartment in Tel Aviv during the third quarter of 2025 was NIS 3,025,000 ($927,000), in Jerusalem NIS 2,899,000 ($889,000), in the Center District NIS 2,613,000 ($801,000), in Haifa NIS 1,880,000 ($576,000), in the South NIS 1,567,000 ($480,000), and in the North NIS 1,564,000 ($479,000).

According to Finance Ministry data for September, a total of 6,925 apartments were sold, 9% less than in August. Compared to a year earlier, sales were down 17%.

The volume of homes bought and sold every month has been down year-over-year in every month of 2025 after peaking in December 2024, Finance Ministry data shows.

New apartment sales, including government-subsidized units, declined by 25% from September 2024 to 2,671 units. Secondhand apartment sales reached 4,254 units, a 10% decline compared to September........

© The Times of Israel