Executive Summary
The Tel Aviv real estate market continued to solidify its status as Israel’s premier and most competitive property market during the first half of 2025. Transaction volumes rose by 7.2% year-over-year, while the average property price surged by 11.6%, reaching ₪4,850,000.
Despite elevated prices, demand remains exceptionally strong, fueled by limited housing supply, rapid tech sector expansion, and Tel Aviv’s enduring appeal to both domestic and international buyers.
This report provides a detailed analysis of key market indicators, residential and commercial real estate trends, and emerging dynamics for Q1–Q2 2025.
Market Overview
Tel Aviv’s real estate market is defined by a persistent imbalance between strong demand and constrained supply.
As Israel’s leading economic, technological, and cultural hub, the city continues to attract homebuyers, investors, and businesses seeking world-class amenities, a dynamic lifestyle, and global connectivity.
Key Market Statistics (Q1–Q2 2025)
- Total Transactions: 3,845 (↑7.2% YoY)
- Average Residential Price: ₪4,850,000 (↑11.6% YoY)
- Average Price per Square Meter: ₪59,700 (↑13.2% YoY)
- Average Time on Market: 41 days (↓12 days YoY)
- Total Mortgage Volume: ₪17.9 billion (↑16.4% YoY)
Residential Market Analysis
Transaction Volume by Property Type
| Property Type | Transactions | YoY Change | Avg. Price (₪) | YoY Price Change |
|---|---|---|---|---|
| Apartments | 3,258 | ↑6.8% | 4,380,000 | ↑10.7% |
| Penthouses | 182 | ↑15.2% | 12,950,000 | ↑18.3% |
| Townhouses | 94 | ↑4.4% | 9,750,000 | ↑13.9% |
| Garden Units | 311 | ↑9.1% | 6,280,000 | ↑12.5% |
Price Trends by Neighborhood
| Neighborhood | Avg. Price (₪) | YoY Change | Avg. ₪/m² | Avg. Time on Market |
|---|---|---|---|---|
| Rothschild/Lev Hair | 7,950,000 | ↑14.8% | 82,500 | 28 days |
| Neve Tzedek | 8,380,000 | ↑16.2% | 86,300 | 25 days |
| North Tel Aviv | 6,750,000 | ↑13.5% | 74,900 | 32 days |
| Florentin | 3,980,000 | ↑9.7% | 53,400 | 38 days |
| Jaffa | 3,550,000 | ↑12.3% | 48,200 | 39 days |
| Tel Aviv Port | 7,250,000 | ↑15.6% | 79,800 | 26 days |
| Sarona/Azrieli | 5,950,000 | ↑12.8% | 65,400 | 34 days |
| Ramat Aviv | 5,820,000 | ↑11.4% | 63,800 | 36 days |
| South Tel Aviv | 2,950,000 | ↑8.3% | 42,600 | 47 days |
| Tel Aviv University | 4,150,000 | ↑9.9% | 51,700 | 43 days |
New Residential Development Projects
Key projects active during H1 2025 include:
- ToHA Residences – 182 luxury apartments, 78% sold, average ₪95,800/m²
- Sarona Gardens – 156 premium apartments, 85% sold, average ₪70,300/m²
- Neve Tzedek Tower – 94 high-end units, 92% sold, average ₪88,500/m²
- Jaffa Port Residences – 118 sea-view apartments, 76% sold, average ₪67,200/m²
- Rothschild 22 Extension – 68 luxury units, 95% sold, average ₪84,100/m²
- The Lighthouse Tower – 209 mixed apartments, 84% sold, average ₪65,800/m²
- Park TLV – 247 apartments, 71% sold, average ₪59,400/m²
- Florentin Heights – 156 urban apartments, 68% sold, average ₪54,700/m²
- North Stars Complex – 203 apartments, 73% sold, average ₪72,300/m²
- South TLV Quarter – 275 apartments, 62% sold, average ₪46,800/m²
Urban Renewal Projects
Tel Aviv remains at the forefront of national urban renewal efforts:
- Pinui-Binui (Evacuation-Reconstruction): 14 active projects creating 1,250 new units, replacing 485 older homes.
- TAMA 38 (Seismic Reinforcement & Upgrades): 23 projects adding 187 units and retrofitting 498 buildings.
- Large-Scale Urban Regeneration: 6 major projects transforming neighborhoods and affecting 1,850 residences.
Commercial Real Estate Analysis
Tel Aviv’s commercial property sector posted robust growth, especially in prime office space and central retail locations.
Commercial Transactions by Type
| Commercial Type | Transactions | YoY Change | Avg. Price (₪) | YoY Price Change | Avg. ₪/m² |
|---|---|---|---|---|---|
| Office Space | 287 | ↑11.2% | 8,450,000 | ↑14.3% | 46,800 |
| Retail Space | 214 | ↑8.6% | 6,750,000 | ↑12.7% | 52,300 |
| Mixed-Use | 78 | ↑16.4% | 12,350,000 | ↑19.5% | 57,800 |
| Industrial | 42 | ↓3.5% | 4,950,000 | ↑5.2% | 18,400 |
Major Commercial Developments
- Azrieli Town Tower: 25,000m² of new office space, 92% leased.
- ToHA Phase 2: 53,000m² premium office space, 85% pre-leased.
- Sarona Market Expansion: 8,500m² of retail space, 97% occupancy.
- Port TLV Commercial: 12,400m² mixed-use retail/office complex, 78% leased.
- Rothschild-Allenby Complex: 18,600m² mixed-use development, 83% leased.
Investment Analysis
Return on Investment (ROI)
| Asset Type | Avg. Annual Rental Yield | Capital Appreciation (H1 2025) | Total ROI (Annualized) |
|---|---|---|---|
| Apartments | 2.7% | 10.7% | 13.4% |
| Penthouses | 2.3% | 18.3% | 20.6% |
| Office Space | 4.4% | 14.3% | 18.7% |
| Retail Space | 5.1% | 12.7% | 17.8% |
Foreign Investment Trends
Foreign buyers represented 31% of transactions in H1 2025, an increase of 3.5% YoY.
- North America: 38%
- France: 23%
- United Kingdom: 14%
- Russia/Eastern Europe: 12%
- Asia: 8%
- Other: 5%
Market Drivers and Challenges
Key Growth Drivers
- Tech Industry Expansion: 18 new multinational R&D centers opened since 2024.
- Infrastructure Improvements: Light rail expansion boosting connectivity and property values.
- Supply Constraints: Scarcity of land pushing up prices, especially in core areas.
- Global Investment Appeal: Continued inflow of international capital.
- Lifestyle Factors: World-class dining, culture, and Mediterranean lifestyle remain strong draws.
Ongoing Challenges
- Affordability Gap: Housing costs now 15.8× average annual salaries.
- Regulatory Risks: Potential tax changes targeting investors.
- Construction Inflation: Material and labor costs rose 18% YoY.
- Interest Rate Sensitivity: Premium buyers increasingly affected by financing costs.
Market Outlook
Forecast for Q3–Q4 2025
- Projected price increase: 8–10%
- Transaction growth to moderate at 3–5%
- Fewer new developments (-5% to -8%) due to land scarcity
- Rental rates expected to rise 12–15% YoY
Longer-Term Projections (2026–2030)
- Completion of major light rail and transport infrastructure
- Expansion of tech and innovation sectors
- Intensified urban regeneration in eastern and southern districts
- Rising focus on luxury high-rise, mixed-use projects
- Continued upward pressure on residential and commercial prices
Luxury Market Spotlight
The ultra-luxury segment (₪10 million+ properties) remained exceptionally strong:
- 187 transactions (↑22% YoY)
- Average sale price: ₪17.8 million (↑19.3% YoY)
- Average time on market: 56 days (↓21 days YoY)
- 54% of purchases by international buyers
- Sea-view premium: +35–48% over non-view properties
Rental Market Analysis
The rental market in Tel Aviv tightened considerably:
- Average Monthly Rent: ₪10,800 (↑15.3% YoY)
- Rental Yield: 2.7% (↓0.2% YoY)
- Vacancy Rate: 1.6% (↓0.7% YoY)
- Average Lease Duration: 18 months (↑3 months YoY)
- Highest Rents: Neve Tzedek (₪18,500/month average)
Methodology
Sources:
- Israel Land Authority transaction records
- Tel Aviv Municipality Planning Department
- Major real estate agency datasets
- Mortgage provider statistics
- Construction permits and approvals
- Israel Central Bureau of Statistics housing data
Data Collection Period: January 1, 2025 – April 26, 2025
Sample Size: 3,845 residential and 621 commercial transactions
About the Author
This report was prepared by offplanisrael, a leading market intelligence firm specializing in Israeli real estate analysis.
For customized insights, bespoke reports, or investment consulting, contact [email protected].
Disclaimer: This report is for informational purposes only and does not constitute financial or investment advice. Data accuracy is believed to be high but is not guaranteed. Real estate markets can change rapidly, and past trends do not predict future performance.
