Tel Aviv home prices fall as other cities gain ground

The gap between home prices in Tel Aviv and other cities has narrowed significantly in recent times, following price declines in deals in the city, according to an analysis of Globes’ urban real estate ranking conducted in 25 of Israel’s biggest cities. The index shows that home prices in Beit Shemesh have increased the most significantly, while apartment prices in Afula, Givatayim, Jerusalem and Hadera have also risen impressively.

“Globes” ranking is based on average transactions of 4-room apartments that were carried out in the third quarter of 2025, compared with the corresponding quarter in 2022. The ranking does not reflect the values of the apartments, but rather the prices that apartment buyers were willing to pay for these apartments in each of the cities.

Tel Aviv: The most expensive but not as expensive as before

Several immediate findings emerge from the data. An apartment in Tel Aviv costs more than three apartments in Beersheva, more than 2.5 apartments in Haifa and as much as an apartment and a quarter in Ramat Gan. However, three years ago the gaps were much greater. Back then, a four-room apartment in Tel Aviv cost as much as four apartments in Beersheva and almost three apartments in Haifa.

The 19 largest cities and main peripheral cities

To put together “Globes” urban real estate ranking, 25 cities were surveyed, including the 19 largest cities in the country according to the Central Bureau of Statistics, as well as smaller cities that border Tel Aviv, central cities in the Sharon region and main peripheral cities that have many real estate transactions.

Afula and Nahariya are the two cities with the highest number of transactions in the Northern District, and although these are cities each have less than 70,000 residents, the number of deals conducted in them since 2020 exceeds much larger cities like Modi’in and Kfar Saba. In the south, no cities generated similar amounts of transactions, and only Beersheva and Ashkelon were included in the ranking.

The data is based on the average price of 4-room apartments reported by the Central Bureau of Statistics, and on a supplementary average calculated by “Globes,” which is based on data from the Israel Tax Authority website.

The narrowing of the gaps is the consequence of price declines in Tel Aviv, resulting from previous price rises in the city putting prices beyond what a large part of the market can or is willing to pay. Deals worth tens of millions of shekels are still being signed in the city, and home prices in the city are still the most expensive in the country, but the gaps are narrowing and people are willing to pay similar prices for apartments in cities like Givatayim, Herzliya and Ramat Hasharon. If in the third quarter of 2022 the price gap between Tel Aviv and the second most expensive city at the time, Ramat Hasharon, reached 33%, the gap in the third quarter of 2025 between a four-room apartment in Tel Aviv and a similar apartment in the city that currently ranks second, Givatayim, reached only 5% and 14% in Herzliya, the city ranked third in the index.

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Several factors influenced the process. First, the big supply of apartments in Tel Aviv, which has reached about 11,000 new unsold apartments. This is an all-time record, which is broken anew every month. Second, the decline in demand for apartments, which was reflected in a continuous decline in the number of deals. If in the peak year, 2021, about 3,700 new apartments were sold in the city, in 2025 only a little more than 2,000 new apartments will be sold.

Low demand and high supply contribute to a decline in prices, and indeed Tel Aviv is one of the two cities where “Globes” found price declines in the quarters examined. Prices in Ramat Hasharon, which in 2022 was the second most expensive city for apartments, rose by “only” 7%, while apartment prices in Givatayim jumped by 24% and in Herzliya by 15%.

If in 2022 Tel Aviv was a city with no alternative and at unrivalled prices, in 2025 it has alternatives and many apartment buyers in Givatayim could purchase an apartment in Tel Aviv but prefer not to.

A turnaround in the Sharon region

Between Herzliya, Ramat Hasharon and Raanana in the Sharon region, three of the most sought-after cities in the country, there is competition to see which city is more prestigious. Three years ago, Ramat Hasharon won the title. This year, Herzliya prevailed, while Ra’anana remains in third place.

The reason for this may be the intensive construction in eastern Ramat Hasharon (near the Morasha Interchange) of new projects as well as urban renewal projects. This is a location that is considered cheaper in the city, and the result is price levels that rose relatively moderately between 2022 and 2025. The fact that the city has a large supply of 1,100 new unsold apartments does not encourage price increases either.

In Raanana, prices also rose quite moderately, and it seems that the cross-section of the population that purchases apartments in the city is different than in Herzliya and Ramat Hasharon and is more traditional and religious in nature. The fact that in the first half of 2025, only 66% of the number of transactions that were carried out in the city in the first half of 2024 and about 50% of those carried out in the first half of 2022, shows that Raanana is not a market of price increases at the moment.

The haredi city that is no longer affordable

When the planning authorities thought about transforming Beit Shemesh from a small town with a traditional Jewish community into a large haredi city, the idea was to make it an affordable city for young haredi families who could not afford the prices of apartments in Jerusalem.

Thousands of apartments in the city were also sold through a government subsidized lottery and the city grew enormously, and in the last 15 years more than 17,000 housing units have been built in Beit Shemesh.

However, despite the construction, the demand for apartments among the haredi population climbed at a much greater rate. Beit Shemesh recorded the largest price increase among the 25 cities examined – an increase of 33% in three years. This is a very unusual rise by any standard.

If three years ago apartment prices in Beit Shemesh reached a level of 65% of those in Jerusalem, now they have already reached 70%, and this is already a long way from affordable housing. It is no wonder that the leaders of the haredi community are looking for more alternatives with new haredi cities and neighborhoods, but as of now, their construction is far away.

The periphery remains behind but prices are rising

Only five peripheral cities are included in the index and some will argue about defining some of them as “periphery”: Haifa, Beersheva, Ashkelon, Afula and Nahariya. All of these cities recorded double-digit price increases in the last three years, and it is easy to understand why: prices in the center of the country have risen far beyond what young people can afford, and with no choice, they are turning to the periphery to look for alternatives.

The city that recorded the biggest increase was Afula, and it is clear that since the Jezreel district was established there at the beginning of the last decade, the real estate market in the sleepy city has been stimulated, and the opening of the railway station has further encouraged the city’s development.

Nahariya is the second northern city that maintains a very high level of transactions, and even significant price increases. The city’s market stood a tough test in the last war, but passed it with great success, at least in terms of prices, which indicates that many believe in the city and are not impressed by its relative proximity to the Lebanese.

Ashkelon is in fifth place in the number of transactions carried out there since 2020 (after Jerusalem, Tel Aviv, Haifa and Beersheva), due to extensive construction in the city in the last decade – over 20,000 housing units. The city began as an “affordable city” but apartment prices there have risen rapidly. In recent years, the pace has slowed slightly, but it is still a city with a booming market.

Haifa and Beersheva were and remain the provincial capitals of the north and south, but their status has weakened greatly over the past 50 years. Both cities face difficult challenges compared with nearby cities – the suburbs of Haifa and Ofakim, Netivot, Sderot near Beersheva, which have a lot of construction and lower prices.

Published by Globes, Israel business news – en.globes.co.il – on December 3, 2025.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.