Israel’s housing sales fall as unsold new homes reach 85,000
Third-quarter transactions dropped 7.3% from a year earlier, while developers’ inventories climbed to nearly 26 months of supply
Israel’s housing market slowed further in the third quarter of 2026, with fewer transactions and a growing backlog of unsold new homes, according to Central Bureau of Statistics figures published Thursday.
A total of 21,750 homes changed hands between July and September, down 5.7% from the previous quarter and 7.3% from the same period in 2025.
The annual decline was particularly steep in the existing-home market, where sales fell 14%. New-home sales dropped 12% from the previous quarter, although they remained 4% above their level a year earlier.
At the end of September, developers held 85,080 unsold new homes—equivalent to nearly 26 months of sales at the current pace.
Jerusalem and Tel Aviv had the largest inventories, with more than 10,000 unsold apartments each. Bat Yam followed with nearly 5,000, while Ramat Gan had around 4,000.
Despite the broader slowdown, the Central and Southern districts remained the busiest markets by transaction volume. Kiryat Gat led new-home sales, supported in part by discounted homeownership programs.
Separate Finance Ministry figures showed sharp regional differences in September. Transactions fell 34% year over year in Tel Aviv and 21% in Jerusalem, while the Haifa region recorded a 49% increase, driven largely by activity in Acre.
Sales in the Beersheba region rose 19%, following eight consecutive months of steep declines.
Developers are increasingly offering deferred-payment arrangements and financing incentives to attract buyers, particularly in Tel Aviv and Beersheba. Such offers allow them to ease buyers’ upfront costs without necessarily lowering advertised prices.
Investor activity remained weak. Investors purchased 849 homes in September, down 29% from a year earlier. A sustained decline in investment purchases could eventually constrain rental supply if demand continues to grow.
Foreign buyers provided a limited countertrend, with purchases rising 33% from August to September—a seasonal increase often seen around the Jewish holidays.
According to the Finance Ministry, US passport holders accounted for 54% of foreign buyers, followed by French passport holders at 17% and British passport holders at 8%.
That increase was insufficient to offset the wider slowdown, leaving the market facing weaker sales and a substantial backlog of unsold homes.