Executive Summary
The Israeli real estate market demonstrated strong and consistent growth during the first half of 2025, with national transaction volumes increasing by 13.6% compared to the same period in 2024. The average residential property price rose by 10.8%, reaching ₪2,945,000.
This report provides a comprehensive analysis of Israel’s diverse regional markets, highlighting major trends, comparative statistics, and forward-looking projections based on national and city-specific data.
National Market Overview
Demand for housing across Israel remained resilient, driven by strong economic fundamentals, a shortage of available housing in prime areas, rapid infrastructure development, and demographic growth. Although regional variations remain notable, all major markets recorded positive growth in both transaction volumes and pricing.
Key National Statistics (Q1–Q2 2025)
- Total Transactions: 48,250 (↑13.6% YoY)
- Average Residential Price: ₪2,945,000 (↑10.8% YoY)
- Average Price Per Square Meter: ₪24,850 (↑12.3% YoY)
- Average Time on Market: 63 days (↓14 days YoY)
- Mortgage Volume: ₪138.2 billion (↑16.7% YoY)
- Construction Starts: 28,450 units (↑8.4% YoY)
Regional Market Comparison
Price and Transaction Performance by Region
| Region/City | Avg. Price (₪) | YoY Change | Avg. ₪/m² | Transactions | Time on Market |
|---|---|---|---|---|---|
| Tel Aviv | 4,850,000 | ↑11.6% | 59,700 | 3,845 | 41 days |
| Jerusalem | 3,180,000 | ↑8.7% | 32,600 | 2,845 | 76 days |
| Haifa | 2,180,000 | ↑9.8% | 17,600 | 2,345 | 68 days |
| Beersheba | 1,650,000 | ↑8.2% | 12,800 | 2,156 | 63 days |
| Netanya | 2,750,000 | ↑12.4% | 24,600 | 2,568 | 52 days |
| Holon | 2,680,000 | ↑10.6% | 21,850 | 2,148 | 57 days |
| Petah Tikva | 2,380,000 | ↑9.4% | 18,600 | 2,784 | 54 days |
| Bnei Brak | 2,450,000 | ↑11.3% | 22,800 | 1,684 | 42 days |
| Beit Shemesh | 2,120,000 | ↑9.5% | 16,800 | 1,487 | 58 days |
| Zichron Ya’akov | 3,680,000 | ↑13.8% | 27,600 | 389 | 67 days |
| Caesarea | 7,950,000 | ↑14.2% | 41,300 | 142 | 72 days |
| Nahariya | 1,985,000 | ↑7.3% | 16,200 | 873 | 62 days |
| Katzrin | 1,245,000 | ↑4.1% | 9,800 | 213 | 94 days |
Transaction Volume by Property Type (National)
| Property Type | Transactions | Avg. Price (₪) | YoY Change |
|---|---|---|---|
| Apartments | 38,650 | 2,380,000 | ↑9.6% |
| Penthouses | 2,145 | 5,850,000 | ↑14.8% |
| Houses/Villas | 4,320 | 4,950,000 | ↑12.4% |
| Garden Units | 2,350 | 2,950,000 | ↑11.3% |
| Duplexes | 785 | 3,450,000 | ↑10.5% |
Market Segmentation and Clustering
Geographic Clusters
- Premium Urban Centers: Tel Aviv, Central Jerusalem, Herzliya Pituach
- Avg. Price: ₪5,350,000 | Appreciation: ↑12.8%
- Metropolitan Residential: Haifa, Rishon LeZion, Petah Tikva
- Avg. Price: ₪2,480,000 | Appreciation: ↑9.7%
- Religious Community Hubs: Bnei Brak, Beit Shemesh, parts of Jerusalem
- Avg. Price: ₪2,380,000 | Appreciation: ↑10.2%
- Lifestyle and Second Home Markets: Caesarea, Zichron Ya’akov, Herzliya Coastal
- Avg. Price: ₪5,750,000 | Appreciation: ↑14.3%
- Peripheral Growth Cities: Beersheba, Nahariya, Afula
- Avg. Price: ₪1,780,000 | Appreciation: ↑7.9%
Investment Performance
| Region/City | Rental Yield | Capital Appreciation | Total ROI |
|---|---|---|---|
| Tel Aviv | 2.7% | 11.6% | 14.3% |
| Haifa | 3.9% | 9.8% | 13.7% |
| Beersheba | 4.6% | 8.2% | 12.8% |
| Netanya | 3.4% | 12.4% | 15.8% |
| Zichron Ya’akov | 2.4% | 13.8% | 16.2% |
Foreign Investment Trends
Foreign buyers accounted for approximately 18.5% of total H1 2025 transactions:
- French: 36%
- North Americans: 28%
- British: 20%
- Eastern European: 10%
- Other: 6%
Commercial Real Estate Overview
| Sector | Avg. Price/m² | Rental Yield | Vacancy Rate |
|---|---|---|---|
| Office Space | ₪21,800 | 5.8% | 7.4% |
| Retail | ₪24,600 | 6.1% | 6.2% |
| Logistics | ₪12,600 | 6.9% | 3.8% |
| Hospitality | ₪32,400 | 6.8% | 8.1% |
Key Market Drivers
- Robust GDP Growth (+4.2%)
- Persistent housing shortage (95,000 unit gap)
- Transportation infrastructure improvements
- Tech sector expansion
- Remote work normalization expanding suburban demand
Challenges and Constraints
- Affordability crisis (housing-to-income ratio of 11.8x)
- Geopolitical risks
- Rising construction costs (+14.6% YoY)
- Regulation uncertainty
- Regional economic disparities
Urban Renewal Impact
Over 22,000 new units added through TAMA 38 and Pinui-Binui projects across major cities, with Tel Aviv and the Central District leading renewal activity.
Future Outlook
Q3–Q4 2025 Forecast
- Price growth: 9–11% nationally
- Transaction volume: 11–13% growth
- Rental increases: 10–12%
- Mortgage rates expected to stabilize around 4.2–4.5%
About the Author
This report was prepared by offplanisrael.com, a leader in Israeli real estate market analysis.
For customized reports, forecasts, or consulting services, please contact [email protected].
Disclaimer: This report is for informational purposes only and does not constitute investment advice. Market conditions may change rapidly.
