Tel Aviv home prices falling sharply

“Globes” reported a month ago that a penthouse in Tel Aviv’s well-heeled Lammed neighborhood in the north of the city was sold for NIS 7.95 million, shortly before the Iran operation in June. The initial asking price was NIS 10.5 million, but the sellers dropped the price by 24%. Since the penthouse did not have a protected room, it could be seen as something isolated, related to the general security situation, but that is not the case.

A quick browse of the Yad 2 website reveals many homes in Tel Aviv that have dropped in price. For example a three-room 76 square meter apartment on Lillian Street near Kikar Hamedina, has cut its asking price from NIS 6.5 million to NIS 6.1 million. A 109 square meter, four-room apartment in Nahalat Yitzhak, has come down from NIS 4.65 million to NIS 4.49 million. A 100 square meter four-room, ground floor apartment on Tiomkin Street in the heart of the city, has come down from NIS 4.31 million to NIS 4.19 million, and a 180 square meter, 5.5-room, ground floor apartment in the Mishtala neighborhood, has come down from NIS 7.15 million to NIS 6.99 million.

There yet clearer examples of price declines, which experienced real estate agents working in Tel Aviv told “Globes” about, with the unequivocal message: the slowdown in the city’s residential market is being clearly felt.

A million-shekel drop from the initial asking price

Some of the realtors operating in Tel Aviv said that they felt a decline in activity, and with it a decline in prices, even before the war. But the actual decline in prices, throughout the city, began in 2024. Data from the Madlan website show that the average price for an apartment in the city peaked at NIS 4.61 million in March 2024, and that by June 2025 it had fallen 8% to NIS 4.21 million.

In deals for new apartments, the decline is slight, from an average of NIS 5.3 million before the war, according to the Madlan website, to an average of NIS 5.261 million in June 2025. In the second-hand market, the decline is clearly felt: from a peak of NIS 4.13 million in March 2022, to NIS 3.363 million in June 2025. Since the end of 2022, there has been an 18% decrease in prices.

“We are marketing an apartment in the Old North of the city, where the owners asked NIS 6.5 million in September 2024. I believed then that it could have been sold for NIS 6 million, but today it is being marketed and will be sold for around NIS 5.5-5.6 million, down about NIS 1 million from the original asking price, and about NIS 500-600,000 from what it was really worth,” says Yaron Rosenbaum of RE/MAX-Win Tel Aviv.

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“For another apartment in the Old North, the owner asked NIS 3.15 million in November 2024. It sold in April for NIS 2.6 million, a fall of more than half a million shekels.”

Shirli Werner, a realtor at RE/MAX Ocean, tells of an apartment in District (Rova) 3 that was also sold for less than the initial asking price: “The owner of the property insisted that we put it up for sale for NIS 7.5 million,” she says. “We told him that the upper range was NIS 7 million, but we advertised for two weeks at the price he asked for, so that he could feel the market. When he saw that nothing was happening, we revised the asking price to NIS 6.95 million and then the apartment was sold. You can see this as a decrease, but we asked a high price to start with, but with transparency with the property owner who knew that we would update to the real market price. This creates a different level of interest from potential buyers, once apartments are priced correctly.

“What is for sure is that, two years ago, at a time when the market was overheating, the situation was exactly the opposite. You could put it on the market at a price of NIS 7 million, and sell for NIS 7.5 million. That’s exactly what happened to us at the time, with an apartment on one of the quiet streets of Tel Aviv near the sea. Nothing like that would happen today.”

Anglo-Saxon real estate company director of urban renewal in Tel Aviv Ron Weissberg talks in the same vein. He recalls, “In 2021, the market was absolutely crazy. People felt that if they didn’t buy an apartment, they would miss out. Today, experts are talking about 9,000 apartments ready for marketing and not sold in Tel Aviv, and back then it was a case of much smaller numbers, and for sure not at such levels.

“I prefer not to share specific details about deals in which there was a price drop, but I say and stand behind it that there are apartments that were sold in the city which were clearly cut by hundreds of thousands of shekels. You see it in ads, in actual marketing, and in deals that were completed. You see significant falls, even taking into account Tel Aviv’s high price levels.”

Eldar Marketing CEO Ronny Cohen says, “We see price falls throughout the city. There is interest, and there are sales. Marketing is more difficult and challenging, there is no doubt about that, but things are happening and apartments are also being sold in Tel Aviv. By the way, an interesting phenomenon that I’ve been seeing recently, and that I still can’t give a precise explanation for, is that at present more special apartments (penthouses, mini-penthouses and garden apartments) are being sold. As you know, these are the more expensive apartments, but they are currently being successfully marketed in larger numbers. I assume that in the not-too-distant future we will understand the exact reason for this.”

Correction and stabilization, or a 3-year trend?

Cohen describes the lower prices as “one-off, non-dramatic” price corrections, mainly in projects approaching occupancy. “In these projects, the developers and contractors cut prices so as not to be left with unsold apartments when they are occupied, and they do this either through real price drops or through offers of some kind. In general, I have felt these declines mainly in the last year, and especially since the beginning of 2025, but not before.”

The view that the current situation is a market correction is also backed up by the numbers. Although home prices in Tel Aviv fell 8%, according to Madlan, this decline must viewed with the correct perspective. At the end of 2020, according to Madlan, the average home price in Tel Aviv was NIS 3.562 million, so even today, after the declines, the average home price in the city is 18% higher than it was four and a half years ago.

“There was a disproportionate rise in 2021, which continued into 2022,” explains Werner, “and the market simply underwent a correction in 2022 and 2023. Between 2023 and 2024, prices were generally stable, and there was no real decline. In 2024, there was even an increase of almost 20% in the number of deals, according to data from the Tax Authority. There is no doubt that sellers today are more realistic, and understand that the buyer knows how to check things out and understand how much similar apartments were sold for. Those motivated to sell will price correctly and sell, and this is in contrast to 2021-2022, when the market operated according to the principle of ‘any price will hit the mark.’ People can look at this as a decline, but it is not really a decline; it’s a market that is stabilizing after a disproportionate rise.”

However, some argue that the downward trend began three years ago, when the government’s judicial reform began, and the political-social tension that came with it. The slowdown was then mainly manifest in a steep decrease in activity, but it also brought with it a decline in prices that continues to this day.

“We have been feeling a significant change in activity for three years now,” says Rosenbaum. “The main trigger was the interest rate hikes that began in the US and Israel, and to this was added the political instability, the reform, and, of course, the war that began on October 7, 2023. In the past 18 months, there has been a clear decline in prices in second-hand apartments, in most areas of the city, and especially in the Old North, the city center and the heart of the city, where the decline is between 10% and 15%. Until a few months ago, it wasn’t written about. The statistics showed that prices continued to rise, but we brokers clearly felt the decline.”

Weissberg adds, “The last three years have been bad for the economy, for understandable reasons and they have been especially bad for the housing market in general, and for Tel Aviv in particular. Tel Aviv is an expensive city, and an expensive product is more affected during such periods, especially when you take into account that in Tel Aviv a major portion of the purchases were made by investors, many of whom came from abroad. We saw a halt to this during the reform days, and even more so during the war. We can say that about 90% of foreign investors left the market, and although the vacuum was filled somewhat by Israeli investors, there is no comparison in terms of volume. Activity has clearly decreased significantly.”

“The market has bottomed out and has started to rise”

Will activity in the Tel Aviv housing market continue to slow? Will we continue to see significant price declines, or will we see the market recover? The industry believes that the trend is likely to reverse.

“About a year ago, buyers started returning to the market, even in larger numbers than on the eve of the war, but the actual number of deals being closed is still low,” says Rosenbaum. “It takes much longer to close deals, and many of them ‘fall’ during the process, and many buyers withdraw. But in the long term, I am optimistic. I believe prices will rise, and a clear distinction will be created for apartments in good condition, renovated and new, the prices of which will increase more easily. Owners of apartments in old buildings, 30-40 years old, without a protected room or shelter, will have a much harder time raising the price.”

“The demand for apartments in Israel, and in Tel Aviv in particular, will not disappear so quickly,” adds Cohen. “The birth rate, the increasing immigration rate, the shortage of apartments carried over from previous years, all guarantee that there will continue to be demand and that people will buy apartments. Anywhere else, from a cold and neutral perspective, the current situation should have led to zero sales in the market, but here this is not happening, because of the pressures of demand. They are materializing more slowly, but it is happening.”

Weissberg says, “In recent months, there has been an increase in enquiries, in responses of potential clients to ads, and even a certain increase in deals, but it is a tiny increase. There are more enquiries, but we cannot say we are seeing a surge in sales. It is clear that, looking ahead, this market will revive at some point. There have already been price declines in real estate, this is not the first time there has been a decline and a slowdown, and as soon as the security situation improves significantly, it will happen, and Tel Aviv will maintain its strength and uniqueness.”

Werner concludes, “Last July, we did more than 30 deals in the office. This is a crazy amount that shows the market is picking up. I feel that there has been a radical change for the better in the market, because people understand that the market has reached a point where it is starting to rise. There is a lot of contact with foreign residents. We receive many enquiries from the US, South Africa, and European countries, from Jews looking for a safe haven home.

“It is true, today there is still an opportunity, because the market is calmer, and it is still possible to buy an apartment without getting into ‘bidding wars’ with other buyers that will increase the price. I believe that, in the coming months, the market will clearly return to being a seller’s market.”

Published by Globes, Israel business news – en.globes.co.il – on August 14, 2025.

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