How much for a property in Israel now?

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?

SANDS OF WEALTH

A team specialized in real estate investing in MENA countries (Morocco, UAE, Oman, 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 Sands of Wealth, 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.

What is the average apartment price in Israel right now?

The average apartment price in Israel stands at NIS 2.358 million (approximately $630,000) as of September 2025.

This represents a 7.5% increase compared to the same period in 2024, showing continued upward momentum in the Israeli residential market. The price reflects the national average across all apartment sizes and locations throughout the country.

Regional variations are significant, with major urban centers commanding substantially higher prices. Jerusalem's average residential property reaches NIS 3.16 million ($870,000), while Tel Aviv maintains its position as the most expensive market with prices averaging NIS 32,200 ($8,900) per square meter.

Smaller apartments drive much of this growth, with 1-2 room units experiencing the strongest price appreciation at 25.7% annually. Mid-size properties (2.5-4 rooms) show more moderate increases of 5.8-5.9%, while large luxury apartments (5.5-6 rooms) see minimal growth at just 0.5%.

The northern regions of Israel lead growth patterns with an 11.7% annual increase, supported by $14 billion in new infrastructure investments including high-speed rail and urban transit projects.

How much does a property cost in Tel Aviv specifically?

Tel Aviv property prices average NIS 32,200 ($8,900) per square meter as of September 2025.

For a typical 70-square-meter apartment in Tel Aviv, buyers should expect to pay approximately NIS 2.254 million ($604,000). A larger 100-square-meter unit would cost around NIS 3.22 million ($863,000), placing Tel Aviv among the most expensive real estate markets in the Middle East.

Tel Aviv's premium pricing reflects its status as Israel's tech hub and financial center, with strong demand from both domestic buyers and international investors. The city's limited land availability and strict building regulations contribute to supply constraints that support high valuations.

Price appreciation in Tel Aviv continues despite already elevated levels, with the market showing resilience even during periods of regional uncertainty. The city attracts significant foreign capital, particularly from North American and European investors seeking exposure to Israel's technology sector.

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

What are property prices like in Jerusalem?

Jerusalem's average residential property price reaches NIS 3.16 million (approximately $870,000) in September 2025.

This represents a 9.8% increase from 2024, outpacing the national average growth rate. Jerusalem's market benefits from unique demand drivers including diaspora investment, religious significance, and its role as Israel's capital city.

Different neighborhoods within Jerusalem show substantial price variations. Central areas like Rechavia and Talbieh command premium prices, while emerging neighborhoods in East Jerusalem and outer districts offer more affordable entry points. The city's diverse religious communities create distinct market segments with varying preferences and budget levels.

Jerusalem attracts significant international Jewish diaspora investment, particularly from North America and Europe. Many buyers purchase properties for personal use, family visits, or as long-term investments tied to religious and cultural connections to the city.

The city's rental market serves a mix of long-term residents, students, and short-term visitors, providing multiple income opportunities for property investors.

Which property types are seeing the biggest price increases?

Smaller apartments experience the strongest price appreciation in Israel's current market cycle.

Property Type	Annual Price Growth	Market Trend
1-2 Room Apartments	+25.7%	Highest demand
2.5-3 Room Units	+5.9%	Moderate growth
3.5-4 Room Units	+5.8%	Steady appreciation
4.5-5 Room Units	+4.0%	Below average growth
5.5-6+ Room Units	+0.5%	Minimal growth
Luxury Properties	Flat to declining	Limited demand

What additional costs should I expect when buying property in Israel?

Property purchase costs in Israel extend well beyond the actual property price, typically adding 5-7% to your total investment.

The property purchase tax (Mas Rechisha) represents the largest additional expense, with rates varying based on property value and buyer status. First-time homebuyers and new immigrants often qualify for reduced rates, while investors face higher tax brackets. Legal fees typically range from 0.5% to 1.5% of the purchase price, covering contract review, title searches, and transaction completion.

Real estate agent commissions amount to approximately 2% plus VAT, paid by the buyer in most transactions. Property inspections cost between NIS 3,000 and NIS 6,000 plus VAT, essential for pre-owned properties to identify potential structural or maintenance issues.

Additional expenses include mortgage arrangement fees if financing is used, building surveyor costs, and various registration fees with government authorities. Currency exchange costs may apply for foreign buyers, along with potential tax advisory fees to navigate Israeli tax regulations.

Insurance requirements and initial utility connections add further costs that buyers should factor into their budget planning before committing to a purchase.

What rental yields can I expect in Israel?

Rental yields in Israel remain modest compared to global real estate markets, typically ranging from 2% to 3.5% annually.

Tel Aviv offers rental yields of 2-3% for apartments and 2.1-2.5% for villas, reflecting the city's high property prices relative to rental income potential. Jerusalem provides slightly higher yields, with apartments generating 2.5-3.5% returns and houses offering 1.85-2.95% yields depending on location and property type.

These relatively low yields indicate that Israeli real estate functions better as a long-term capital appreciation investment rather than an income-generating asset. The high purchase prices relative to rental rates create this yield compression, common in premium global markets.

Short-term rental opportunities through platforms like Airbnb can potentially increase yields in tourist-heavy areas, though regulatory restrictions and seasonal variations affect consistency. Long-term rental demand remains strong due to Israel's housing shortage and growing population.

Investors focusing on rental income should carefully analyze local rental markets and consider properties in emerging neighborhoods where yield potential may be higher due to lower acquisition costs.

How do Israel's property prices compare regionally?

Tel Aviv's property prices rank among the highest in the Middle East and North Africa region.

At NIS 32,200 ($8,900) per square meter, Tel Aviv significantly exceeds regional competitors including Muscat, Casablanca, Cairo, and Amman. This premium positioning reflects Israel's developed economy, strong currency, and attraction to international capital flows.

The price-to-income ratio in Tel Aviv reaches 23.3, among the steepest affordability challenges globally. This metric indicates that property prices have outpaced local income growth, creating accessibility issues for domestic buyers but potentially attractive opportunities for foreign investors with stronger currencies.

Regional infrastructure development and political stability contribute to Israel's premium market positioning. The country's tech sector growth, educational institutions, and healthcare system create demand drivers not present in many neighboring markets.

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

Which regions in Israel show the strongest price growth?

Northern Israel leads property price appreciation with 11.7% annual growth as of September 2025.

This growth acceleration stems from $14 billion in infrastructure investments including high-speed rail connections and urban light rail systems. Cities like Haifa, Nazareth, and smaller northern communities benefit from improved connectivity to Tel Aviv and Jerusalem employment centers.

The northern region offers relative affordability compared to central Israel while maintaining access to major urban areas through enhanced transportation infrastructure. This combination attracts both domestic buyers seeking value and investors anticipating further appreciation as projects complete.

Coastal areas in the north, particularly around Haifa and Akko, benefit from scenic locations and tourism potential alongside infrastructure improvements. Industrial development in the region, including technology parks and manufacturing facilities, supports local employment and housing demand.

Government incentives for development in peripheral areas further support northern region growth, including tax benefits and simplified permitting processes for new construction projects.

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.

What financing options exist for property purchases in Israel?

Israeli banks offer mortgage financing for both residents and eligible foreign buyers, typically up to 70% of property value.

Interest rates in Israel currently hover around 4.5%, influenced by the Bank of Israel's monetary policy and inflation targeting. Loan terms typically extend 20-30 years, with both fixed and variable rate options available depending on borrower preferences and market conditions.

Foreign buyers face additional requirements including higher down payment percentages, proof of foreign income, and currency hedging considerations. Some banks specialize in serving the international buyer market, offering services in multiple languages and expertise in cross-border transactions.

Alternative financing through private lenders or developer financing arrangements may be available for specific projects or buyer situations. These options often carry higher costs but provide flexibility for buyers who don't qualify for traditional bank mortgages.

Mortgage approval processes in Israel typically require 2-3 months, including property valuation, income verification, and legal documentation review. Pre-approval can streamline the purchase process and strengthen negotiating positions with sellers.

Should I buy property in Israel for investment purposes?

Israeli real estate suits investors seeking long-term capital appreciation rather than immediate rental income.

The combination of modest rental yields (2-3.5%) and strong price appreciation (7.5% annually) creates an investment profile focused on capital growth. This approach works well for investors with longer time horizons who can wait for compound appreciation while accepting lower current income.

Market fundamentals support continued growth including population increase, housing shortages, and foreign capital inflows. Israel's technology sector expansion and economic stability provide underlying demand drivers that sustain property values through various economic cycles.

Risks include high transaction costs (5-7% of purchase price), currency fluctuations for foreign buyers, and geopolitical uncertainties that can affect market sentiment. High property prices relative to local incomes also create vulnerability to economic downturns or interest rate increases.

Successful investment strategies focus on emerging neighborhoods, infrastructure development areas, or properties with value-add potential through renovation or repositioning. Location selection remains critical given wide price variations within cities and regions.

What are the risks of investing in Israeli real estate?

Geopolitical instability represents the primary risk factor for Israeli real estate investment.

1. **Regional security concerns** can affect investor sentiment and property values, particularly during conflict periods2. **High interest rates** around 4.5% increase borrowing costs and may pressure highly leveraged investors3. **Inflation at 3.6%** erodes purchasing power and affects construction costs4. **Currency volatility** impacts foreign investors through exchange rate fluctuations5. **Regulatory changes** in taxation, foreign ownership rules, or rental regulations can affect investment returns6. **Market overvaluation** concerns given high price-to-income ratios may indicate correction risks

Economic factors including Israel's reliance on technology sector performance and global economic conditions also influence real estate markets. Interest rate changes by the Bank of Israel directly affect mortgage accessibility and property demand levels.

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

What is the outlook for Israeli property prices in 2026?

Israeli property prices are projected to increase 3-7% annually through 2026, supported by structural market fundamentals.

Continued population growth, housing shortages, and foreign capital inflows provide upward pressure on prices despite high current valuations. Government infrastructure investments, particularly in northern regions and transportation connectivity, should support regional price appreciation.

Interest rate trends will significantly influence market dynamics, with potential rate reductions supporting higher price growth while increases could moderate appreciation. Inflation management by the Bank of Israel affects both construction costs and buyer purchasing power.

Strong demand for smaller apartments (1-2 rooms) should persist, driven by young professionals, students, and investors seeking entry-level properties. Luxury market growth may remain limited due to affordability constraints and changing buyer preferences.

Regional variations will continue, with Tel Aviv and Jerusalem maintaining premium positions while northern areas and emerging neighborhoods offer stronger percentage growth potential from lower base prices.

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.

Sources

1. Israel Real Estate - Israel's Real Estate Market in 2025
2. Sands Of Wealth - Are Israel property prices going up now?
3. Sands Of Wealth - Are Tel Aviv property prices going up now?
4. Genesis Estates - The Real Cost of Real Estate Purchases in Israel
5. Easy Aliyah - Complete Guide to Property Purchase Tax in Israel
6. Sands Of Wealth - The trends in the Israeli property market