What is the average apartment price in Israel?

Authored by the expert who managed and guided the team behind the Israel Property Pack

Everything you need to know before buying real estate is included in our Israel Property Pack

Who is the author of this content?

SANDSOFWEALTH

A team specialized in real estate investing in Middle East countries (Israel, UAE, Jordan, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Israel. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At SandsOfWealth, we explore the Israeli real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Tel Aviv, Jerusalem, and Haifa. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

How much does an average apartment cost in Israel right now, including all taxes and fees?

The average apartment price in Israel stands at NIS 2.36 million ($650,000) as of June 2025, based on Central Bureau of Statistics data.

However, the total cost including all taxes and fees typically runs 15-20% higher than the purchase price. For a standard NIS 2.36 million apartment, expect to pay an additional NIS 354,000-472,000 in various costs.

Purchase tax (Mas Rechisha) varies dramatically from 0% for qualifying first-time buyers up to 12% for higher-value properties or non-residents. Legal fees typically run 1-2% of the purchase price, while agent commissions average 2%. New construction carries an additional 18% VAT, while secondhand properties are exempt from this tax.

Registration fees, inspection costs, and ongoing expenses like maintenance and insurance add several thousand shekels to your total investment. For new immigrants, recent reforms offer significant tax breaks that can virtually eliminate purchase taxes on apartments up to NIS 6 million.

How do apartment prices differ across major cities like Tel Aviv, Jerusalem, and Haifa?

Israel's apartment market shows dramatic price variations between major cities, reflecting local demand, amenities, and economic opportunities.

Tel Aviv commands the highest prices nationwide, with standard apartments averaging NIS 4.1-4.5 million ($1.1-1.2 million). Recent sales include an 84 m² three-room apartment that sold for NIS 4.45 million in May 2025, highlighting the premium buyers pay for central locations.

Jerusalem follows as the second most expensive market, with four-room apartments averaging NIS 3 million. The city's unique blend of historical significance and modern amenities drives consistent demand from both domestic and international buyers.

Haifa offers more affordable options at NIS 1.9 million for a typical four-room apartment. Recent transactions show 113 m² four-room apartments selling for around NIS 2.6 million, making it an attractive alternative for buyers priced out of Tel Aviv and Jerusalem.

Be'er Sheva represents the most affordable major city option at NIS 1.28 million average for four-room apartments, offering significant value for families and investors seeking growth potential in emerging markets.

What are the most expensive, most affordable, and most up-and-coming areas in Israel for buying an apartment?

Israel's real estate landscape offers distinct investment and lifestyle opportunities across different price segments and growth trajectories.

The most expensive areas center around Tel Aviv's core districts, Herzliya's luxury developments, and premium Jerusalem neighborhoods like Rehavia and the German Colony. These locations command prices exceeding NIS 5 million for quality apartments, driven by proximity to business centers, cultural amenities, and historical significance.

Most affordable options cluster in southern cities including Be'er Sheva, Dimona, Netivot, and northern locations like Afula and Tiberias. These markets offer four-room apartments starting around NIS 1.3 million, providing excellent value for families and first-time buyers.

Up-and-coming areas show strong growth potential driven by infrastructure development and economic expansion. Kiryat Gat benefits from tech industry growth and new transportation links. Hadera attracts buyers with coastal location and new residential developments, while Carmei Gat offers family-friendly environments at accessible prices.

Urban renewal projects in Lod and Ramla create opportunities for capital appreciation, particularly given their proximity to Tel Aviv. Post-conflict investment potential in Ashkelon may attract value-seeking investors as the market stabilizes.

What are the average prices for apartments based on size (1-bedroom, 2-bedroom, etc.) and surface area in square meters?

Apartment Size	Rooms (Israeli Standard)	Average Price Range	Tel Aviv Price Range	Typical Surface Area
1-bedroom	1-2 rooms	NIS 1.75M	NIS 2.5-4M	35-50 m²
2-bedroom	3 rooms	NIS 1.81M	NIS 3.15-3.6M	45-80 m²
3-bedroom	4 rooms	NIS 2.35M	NIS 4-5M	80-110 m²
4-bedroom	5 rooms	NIS 3M	NIS 5-6M	110-140 m²
5+ bedrooms	6+ rooms	NIS 3.5M+	NIS 6M+	140+ m²

How do prices vary depending on the type of apartment—new builds, second-hand, luxury units, or old buildings?

Apartment type significantly influences pricing, with distinct market segments serving different buyer preferences and budgets.

New construction commands premium prices due to modern amenities, energy efficiency, and contemporary design. These properties carry 18% VAT, adding substantial costs but often justify higher prices through reduced maintenance needs and modern infrastructure. Recent sales show new apartments selling 10-15% above comparable secondhand units.

Secondhand apartments offer value opportunities without VAT obligations, making them attractive to budget-conscious buyers. However, potential renovation costs and older building systems can offset initial savings. Many buyers find these properties ideal for customization and immediate occupancy.

Luxury units in prime locations command exceptional premiums, particularly in Tel Aviv's central districts and Jerusalem's prestigious neighborhoods. These properties often exceed NIS 50,000 per square meter in top locations, targeting high-net-worth individuals and international investors.

Older buildings typically offer the lowest per-square-meter prices but may require significant investment in renovations, elevator installations, and building maintenance. These properties attract investors seeking value-add opportunities and buyers willing to undertake improvement projects.

It's something we develop in our Israel property pack.

Can you give example purchase prices for typical apartments in Tel Aviv, Jerusalem, and a smaller city?

Recent transaction data provides clear examples of current market pricing across Israel's diverse real estate landscape.

In Tel Aviv, a typical 84 m² three-room apartment on Zeitlin Street sold for NIS 4.45 million ($1.23 million) in May 2025. This third-floor unit in a 1930s building represents standard pricing for central Tel Aviv locations. A newer 120 m² five-room apartment on Asirei Zion Street commanded NIS 4.35 million, showing how newer construction maintains premium pricing.

Jerusalem examples include an 82 m² four-room apartment on Leib Yaffe Street that sold for NIS 3.05 million ($857,000) in May 2025. This second-floor unit with parking demonstrates typical Jerusalem pricing for established neighborhoods. Larger properties like a 114 m² six-room apartment on Dan Street reached NIS 4.48 million, reflecting premium pricing for additional space.

Be'er Sheva offers dramatically different pricing, with four-room apartments averaging NIS 1.28 million ($350,000). A 179 m² five-room apartment on Yehoyachin Street sold for NIS 2.03 million, showing how buyers can access significantly more space for their investment in smaller cities.

These examples highlight the substantial price gaps between major metropolitan areas and emerging markets, offering different value propositions for various buyer profiles.

How have apartment prices changed compared to 1 year ago and 5 years ago?

Israel's apartment market has experienced significant appreciation over both short and long-term periods, despite economic uncertainties and conflict-related disruptions.

Year-over-year price growth reached 6.4% through March 2025, with some cities experiencing even higher increases. This growth occurred despite elevated interest rates and reduced transaction volumes, demonstrating the market's underlying strength driven by persistent supply shortages and strong demographic demand.

The five-year appreciation story is even more dramatic, with many cities experiencing 30-70% price increases since 2020. Tel Aviv and Haifa led these gains, driven by technology sector growth, international investment, and limited land availability for new development.

Notably, prices have risen consistently over the past year following a temporary dip after October 7, 2023. The market's resilience during wartime conditions surprised many analysts, as buyers treated real estate as a hedge against uncertainty and inflation.

Long-term data shows prices have doubled or tripled in some areas over the past decade, making homeownership increasingly challenging for first-time buyers while rewarding existing property owners with substantial equity gains.

What are the predictions for apartment prices in 1 year, 5 years, and 10 years?

Market forecasts suggest continued price appreciation across different time horizons, though growth rates may moderate from recent peaks.

One-year predictions indicate moderate growth of 3-8%, as high interest rates and new financing restrictions may cool speculative activity. However, the underlying supply-demand imbalance suggests prices are unlikely to decline significantly, particularly in major metropolitan areas.

Five-year forecasts remain optimistic, with continued gradual growth expected especially in up-and-coming areas benefiting from infrastructure investment. Cities like Kiryat Gat, Hadera, and locations with improved transportation links should outperform national averages as they attract new residents and businesses.

Ten-year projections suggest sustained growth but at slower paces than the previous decade, with potential for market corrections if supply meaningfully increases. Government initiatives to boost construction and reduce regulatory barriers could moderate price growth, though demographic trends and land constraints support continued appreciation.

Geopolitical stability will significantly influence these projections, with peace dividends potentially accelerating investment and development across the country. Infrastructure projects like expanded rail networks and new employment centers will create regional growth opportunities.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Israel versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

How does the cost of buying an apartment in Israel compare to similar cities like Athens, Barcelona, or Berlin?

International comparisons reveal Israel's apartment market as expensive relative to many European cities, though competitive with other major metropolitan areas.

Tel Aviv's central areas command $8,000-$10,000+ per square meter, placing it above Berlin and Barcelona's central districts and significantly higher than Athens. This pricing reflects Tel Aviv's role as a major technology and financial center, comparable to other global cities with similar economic profiles.

Jerusalem's $4,000-$6,000 per square meter aligns closely with Berlin's central areas while exceeding Athens' typical pricing. The city's unique historical and religious significance creates demand patterns distinct from purely economic considerations.

Be'er Sheva at $2,000-$3,000 per square meter offers pricing similar to or below Athens' central areas, making it attractive for value-seeking investors. This price point provides access to Israel's market at European affordability levels.

Rental yields in Israel range from 2-4%, similar to Berlin and Barcelona but lower than Athens' typical 5-7% returns. This reflects Israel's capital appreciation focus rather than income generation, typical of markets with strong price growth expectations.

Transaction costs and taxes in Israel can be higher than European comparisons, particularly for non-resident buyers, impacting overall investment returns and making careful analysis essential for international investors.

What are the best options if you're buying to live in the apartment long-term?

Long-term residence considerations focus on lifestyle factors, community amenities, and financial sustainability rather than short-term investment returns.

Buying proves advantageous for long-term residents with stable income and sufficient capital, particularly in neighborhoods with strong schools, healthcare access, and transportation connections. Government incentives for first-time buyers can significantly reduce purchase costs for qualifying residents.

Renting offers flexibility for new immigrants or those uncertain about long-term location preferences. Current market conditions show rental costs approximately 30% lower than mortgage payments, making renting financially attractive in the short term.

Emerging institutional rental markets provide regulated, professional management for long-term tenants seeking stability without ownership responsibilities. These options combine rental flexibility with improved tenant protections and service quality.

Location selection should prioritize daily convenience over investment potential for long-term residents. Areas with established infrastructure, community services, and cultural amenities typically provide better quality of life than emerging markets focused on capital appreciation.

Consider neighborhood demographics, language prevalence, and cultural fit when choosing long-term residence locations, as these factors significantly impact daily life satisfaction beyond financial considerations.

What makes more financial sense: buying to rent short-term (like Airbnb), long-term rental, or buying to sell at a higher price later?

Investment strategy selection depends on risk tolerance, management capacity, and market timing considerations, with each approach offering distinct advantages and challenges.

1. **Short-term rentals (Airbnb)** potentially generate higher income but face regulatory restrictions and higher management costs. Success depends on location, tourist demand, and ability to handle frequent turnovers and guest services.2. **Long-term rentals** provide stable 2-4% gross yields with lower management requirements. This strategy suits investors seeking steady income with minimal hands-on involvement, though returns may not keep pace with inflation.3. **Buy-to-sell strategies** offer highest profit potential but carry significant transaction costs and market timing risks. Israeli transaction costs can reach 15-20% of property value, requiring substantial appreciation to generate profits.4. **Buy-and-hold combinations** often work best, allowing rental income to offset carrying costs while building equity through appreciation. This approach provides both income and capital growth opportunities.5. **Market timing considerations** suggest current high prices may favor rental strategies over immediate resale, while long-term demographic trends support appreciation for patient investors.

It's something we develop in our Israel property pack.

What are the total monthly costs after buying an apartment—mortgage, taxes, maintenance, and insurance?

Understanding total monthly ownership costs helps buyers budget accurately and compare ownership with rental alternatives.

Mortgage payments for a NIS 2.36 million apartment with 50% down payment at 4.5% interest over 25 years run approximately NIS 7,000 monthly. Current interest rates significantly impact these calculations, with rate changes directly affecting affordability.

Arnona (municipal tax) varies by city and property size, typically ranging NIS 3,000-6,000 annually (NIS 250-500 monthly). Tel Aviv and Jerusalem command higher rates than smaller cities, reflecting superior municipal services and infrastructure.

Maintenance fees (Va'ad Bayit) depend on building amenities and age, running NIS 300-1,000 monthly. Newer buildings with elevators, security, and gardens command higher fees, while older buildings may require special assessments for major repairs.

Property insurance costs NIS 1,000-3,000 annually (NIS 85-250 monthly), with rates varying based on location, building type, and coverage levels. Comprehensive policies protecting against terrorism and natural disasters cost more but provide essential protection.

Utilities including electricity, water, gas, and internet typically run NIS 600-1,200 monthly depending on apartment size and usage patterns. Energy-efficient newer apartments may have lower utility costs than older buildings.

Total monthly costs typically range NIS 8,000-9,000 for a standard apartment, making ownership significantly more expensive than renting in current market conditions.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

It's something we develop in our Israel property pack.

Sources

1. Times of Israel - Housing Snapshot May 2025
2. Global Property Guide - Israel Price History
3. Trading Economics - Israel Housing Index
4. Times of Israel - Housing Snapshot February 2025
5. Times of Israel - Real Estate Predictions 2025
6. Semerenko Group - Israel Real Estate 2025
7. Times of Israel - Housing Snapshot April 2025
8. Buy It In Israel - New Apartment Supply
9. Sands of Wealth - Jerusalem Real Estate Market
10. The Tel Avivi - Israel Real Estate Update