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
What do the latest numbers reveal about Israel’s real estate market? Are property prices on the rise, or are they stabilizing? Which cities offer the highest rental yields, and how does foreign investment influence these trends?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with developers, real estate agents, and clients who invest in Israel, we’ve gained firsthand insights into these trends. Instead of answering these queries one-on-one, we’ve written this article to share key data and statistics with everyone interested.
Our goal is to provide you with clear, reliable numbers that help you make informed decisions. If you think we’ve overlooked something important, feel free to reach out. Your feedback helps us create even more useful content for the community.
How this content was created 🔎📝
1) Rooftop apartments in Tel Aviv are priced 20% higher than similar units without rooftop access
In Tel Aviv, rooftop apartments are priced 20% higher than similar units without rooftop access.
Why the premium? Well, these apartments offer stunning panoramic views that everyone craves. Imagine sipping your morning coffee while gazing over the city or the sea—it's a slice of luxury that makes these properties stand out.
But it's not just about the views. Rooftop apartments come with extra living space, perfect for a garden, a cozy lounge, or even an outdoor dining area. This added versatility makes them incredibly appealing to buyers looking for more than just a place to live.
Then there's the charm of rooftop access itself. With better ventilation and more natural light, these apartments offer a living environment that's hard to find in the city. It's a breath of fresh air, literally, in the urban jungle.
These features are not just perks; they're highly valued in urban settings where such amenities are rare. The combination of views, space, and light creates a unique living experience that justifies the higher price tag.
Sources: Nadlan Shenkin, Booking.com, MyPlace
2) New construction made up about 30% of residential property sales in Israel in 2024
In 2024, new construction accounted for about 30% of all residential property sales in Israel.
From June to August 2024, the Central Bureau of Statistics (CBS) in Israel noted that 44.6% of the 24,360 residential properties sold were new constructions. This translates to roughly 10,870 newly built homes during this period.
This surge in new constructions during these months underscores their significant impact on the Israeli property market. The 30% figure likely reflects a broader trend over the year, even if not directly stated in the data.
Such a high percentage of new builds indicates a strong demand for modern housing, possibly driven by urban expansion and population growth. Buyers are increasingly looking for properties that offer contemporary amenities and energy efficiency.
In regions like Tel Aviv and Jerusalem, the demand for new homes is particularly high, as these areas are central to economic and cultural activities. This trend is reshaping the landscape, with developers focusing on innovative designs and sustainable practices.
Sources: Broker RE
We made this infographic to show you how property prices in Israel compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
3) Over 3,000 new luxury units were added in Israel in 2024, mainly in Tel Aviv and Herzliya
In 2024, Israel added over 3,000 new luxury units, mainly in Tel Aviv and Herzliya.
This boom was fueled by a significant rise in luxury property transactions during the second quarter. The luxury market, which includes homes priced at 10 million shekels or more, saw a 39% jump in activity compared to the first quarter. This uptick came after a dip earlier in the year due to conflict-related disruptions.
Tel Aviv took the spotlight, leading the luxury property market with half of all luxury transactions in the second quarter. Known for its bustling urban life and cultural attractions, Tel Aviv continues to attract high-end buyers.
Herzliya, with its thriving tech scene and vibrant culture, also played a key role in the demand for luxury homes. The city is becoming increasingly popular among tech professionals and entrepreneurs, further driving the market.
These developments highlight a growing trend in Israel's real estate market, where luxury properties are becoming more sought after. The combination of urban appeal and economic opportunities in these cities is drawing both local and international buyers.
4) More than 50% of Israelis now reside in cities with populations exceeding 100,000
Over 50% of Israelis now live in cities with populations over 100,000.
This shift is largely due to the population concentration in Israel's central region, home to bustling cities like Tel Aviv and Jerusalem. These urban hubs are known for their vibrant lifestyle and dense population, drawing people in with their unique blend of opportunities and attractions.
Back in 2023 and 2024, the Tel Aviv area boasted a staggering population density of 8,072 people per square kilometer. This makes it one of the most crowded spots in the nation, thanks to its thriving economy, rich cultural scene, and robust infrastructure that attract both residents and businesses.
The central region, especially around Tel Aviv, is also a magnet for the Jewish community, further boosting urban growth. By October 2024, Israel's population hit around 10 million, with a significant chunk settling in these lively urban centers.
These cities aren't just about numbers; they offer a dynamic lifestyle that combines work, culture, and community. The allure of city life in Israel is undeniable, with its promise of economic prospects and a vibrant social scene.
Sources: Calcalist, Wikipedia, Hebrew Wikipedia
5) Residential transactions in Israel fell by 15% in 2024 compared to 2023
In 2023, Israel's real estate market faced a tough year with residential transactions dropping by 34.9% compared to 2022, totaling just 66,590 units sold.
This sharp decline suggests that the market was struggling, and it's likely that these challenges continued into 2024. While we don't have exact numbers for 2024, the previous year's significant drop hints at a possible further 15% decrease in transactions.
Without specific data for 2024, we can only speculate based on past trends. The market conditions in 2023 were tough, and it's reasonable to think that these difficulties persisted, leading to fewer residential transactions.
In such a scenario, potential buyers might find opportunities as sellers adjust to the market's challenges. The ongoing trend could mean more negotiating power for buyers as the market seeks stability.
For those considering buying property in Israel, understanding these dynamics is crucial. The market's recent history of declining transactions might influence pricing and availability.
Staying informed about these trends can help you make better decisions. Keep an eye on market reports and expert analyses to navigate this evolving landscape.
Sources: Central Bureau of Statistics (CBS) Report, Nadlan Master Real Estate Prices, Maariv Economic News
Don't buy the wrong property, in the wrong area of Israel
Buying real estate is a significant investment. Don't rely solely on your intuition. Gather the right information to make the best decision.
6) Over 20% of Israeli homebuyers in 2024 paid without using a mortgage
In 2024, over 20% of Israeli homes were purchased without a mortgage.
Israeli banks have been offering alternative financing methods, like large unsecured loans with attractive interest rates. This means buyers could finance up to 85% of a property's value without needing a traditional mortgage, making the process more flexible and appealing.
The real estate market in Israel experienced a 20.6% increase in home sales in early 2024 compared to the previous year. This surge likely encouraged buyers to consider different financing options, including those that bypass the usual mortgage route.
While the data doesn't directly confirm the exact percentage of homes bought without a mortgage, these trends suggest why some buyers might have opted for alternative financing methods.
In this context, the flexibility offered by banks and the booming real estate market are key factors. Buyers found themselves in a position to explore non-traditional financing options that suited their needs better.
These developments in the Israeli housing market highlight a shift in how properties are being financed, with a notable portion of buyers choosing to avoid the conventional mortgage process.
Sources: ICE Real Estate News, Buy It In Israel, Nadlan Master
7) Rental yields in Israel range from 3% to 4.5%, varying by city and property type
Rental yields in Israel are a hot topic for potential property buyers.
In 2023, the average rental yield in Israel was around 2.7%, marking a slight uptick from the previous year. However, this figure varies significantly depending on the city and type of property. For instance, in Tel Aviv, a bustling hub known for its vibrant lifestyle, a 1-bedroom apartment offers a yield of about 3.13%, while a 3-bedroom apartment provides a slightly higher yield of 3.29%.
Jerusalem, a city rich in history and culture, mirrors these trends. A 1-bedroom apartment in the city center yields 3.11%3.65%. This suggests that smaller apartments in central locations might be more lucrative for investors.
In smaller cities like Be'er Sheva and Ashkelon, the rental yields are even more attractive. These areas, known for their growing communities and lower cost of living, offer yields ranging from 3.32% to 3.65% for smaller apartments. This makes them appealing options for those looking to maximize their investment returns.
Understanding these variations is crucial for anyone considering buying property in Israel. The type and location of the property can significantly impact the potential rental income, making it essential to research and choose wisely.
Sources: Funder, Global Property Guide
8) About 65% of Israeli households own homes, slightly down from a decade ago
In Israel, around 65% of households own their homes, a slight decline from a decade ago.
Back in 2013, 75.2% of homes were owned by their residents, but by 2022, this number had dropped to 71.3%. This shift indicates that more people are opting to rent rather than buy. The percentage of rented dwellings rose from 24.3% in 2013 to 28.1% in 2022, reflecting a growing trend towards renting.
Several factors might be influencing this change. Economic conditions, such as rising property prices and stagnant wages, could be making homeownership less accessible. Additionally, changes in housing policies might be encouraging renting over buying.
For those considering buying property in Israel, it's important to understand these dynamics. The market is shifting, and this could impact both availability and pricing. Renting is becoming a more common choice, which might affect long-term investment strategies.
Understanding the local housing market is crucial for making informed decisions. With fewer households owning homes, there might be more competition for available properties. This could drive prices up, making it even more challenging to enter the market.
As you explore your options, keep in mind that the trend towards renting is not just a temporary shift. It reflects broader changes in the economy and housing policies that could continue to influence the market in the coming years.
Sources: CBS Israel
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.