Home prices in Israel edged downwards in December 2025 to January 2026 after two consecutive months of increases, according to the most recent information available from the Central Bureau of Statistics.

The housing price index declined by 0.1% compared to the previous period, the ninth monthly drop in the past year. Over the past 12 months, home prices have fallen 0.9%.

The housing market had slowed throughout most of 2025, partially 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 near a four-year high at NIS 3.12, is also affecting demand from overseas buyers.

Jerusalem recorded the sharpest decline during the two-month period at 0.9%, followed by the Center district, which fell by 0.6%. Tel Aviv saw prices rise by 0.7% during the same period, while the South and Haifa districts both saw marginal gains of 0.1%.

Over the past 12 months, prices have risen by 5.4% in Jerusalem, 3.2% in the north, 0.6% in the south, and 0.5% in Haifa. Prices declined by 3.9% in the central district and 2.8% in Tel Aviv.

According to Finance Ministry data for January, 6,933 transactions were recorded during the month, a 9% drop compared to the same month the previous year. That decline was actually steeper than it looks, because January 2025 sales were unusually low after buyers rushed to complete purchases in December 2025 to avoid paying a higher VAT rate.

New home sales dropped 20% from the past year to 2,315 units. Secondhand home sales fell 3% to 4,618 units, while investment acquisitions dropped 9% to 1,088 apartments.

A separate report by CBS detailed the rising number of Israelis living in rented homes, in a country where homeownership has traditionally been valued.

As of July 2025, approximately 3.02 million residential housing units exist in Israel, of which 69.8% are owned by their residents, and 29.6% are rented. For comparison, in 2013, 75.2% of Israelis lived in homes they owned, and only 24.3% rented.

The shifting demographic is attributed to rising real estate costs.........

© The Times of Israel