Israel’s new homes sales reflect crisis in market

Ofakim leads in sales of new apartments in Israel. The real estate significance of this is that on the eve of the outbreak of war with Iran, the real estate market, new apartments in particular, was in deep crisis.

In Jerusalem, the number of new apartments purchased in March-May 2025 fell almost 60%, in Tel Aviv more than 50%, and Beersheva did not even make the table. The supply of apartments continues to break records and has already reached 81,000 housing units, which is over a year of building starts, the Central Bureau of Statistics reports.

There is no data yet from June, the month in which the 12-day war between Israel and Iran raged, but from the months before it, it is clear how weakened the real estate market was going into the war. 6,820 deals were carried out in May, down 20% from May 2024 and up 4% from April, in which Passover fell. Usually, the months after Passover see a major rise in the number of deals, due to deals postponed from the holiday, but this year this did not happen.

Ofakim was the leading city in terms of new apartment sales. 532 apartments were sold there between March and May 2025, down 21% from the previous three months (December 2024-February 2025). Between December 2024 and February 2025, such a number would have put Ofakim fourth.

Low point in Tel Aviv and Jerusalem

Despite the decline, Ofakim leads the table because Tel Aviv and Jerusalem suffered a severe slump in sales in these three months. In Tel Aviv, sales of new apartments fell by 51% to only 461, which was still enough to put it in second place, while Jerusalem, where sales fell 59%, was fifth with 358 new apartments sold. Ashdod was third, with 461 apartments sold, and Lod was fourth with 392 apartments sold.

Overall including all apartments, the leaders in the real estate market in Israel are the big cities: Jerusalem, 1,218 apartments were sold between March and May, Tel Aviv, where 1,074 apartments were sold, Haifa, where 1,042 apartments were sold, and Beersheva, where about 900 apartments were sold. The data show that the southern city has been completely ousted from the top of new apartment sales – further evidence of the market’s slump, and probably one that strengthens the claim of Beersheva Mayor Rubik Danilovich that Ofakim, whose residents enjoy tax benefits, is “stealing” residents from Beersheva, who prefer to purchase apartments in the nearby small city, which are slightly cheaper but offer significant benefits to households.

In total 21,800 homes sold

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Looking at the total market, in the three months from March to May, 21,800 apartments were sold, down almost 25% from the previous three months, and down 14% from the corresponding period in 2024. The main declines were recorded in new apartments, down 365 from the previous three months and down 28% from March-May 2024. The main declines in the sale of new apartments were recorded in Tel Aviv (down 44%), Haifa (48%) and Jerusalem (44%). In the second-hand apartment market, the declines were much more moderate, totaling 14%.

All of this directly affects the supply of new apartments, which continues to break records, and in May it reached 81,000. To get rid of this inventory, developers will need 30 months, according to the current pace of purchases. This is a pace three times slower than 4 years ago, when the market was at its peak.

Tel Aviv continues to lead the supply of apartments with 10,140 new apartments for sale in the city, followed by Jerusalem with 7,774 apartments, Bat Yam with 4,405 apartments and Netanya with 3,699 apartments.

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

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