New vs. old: Israel's market splits in two

Whether buying in Jerusalem, Netanya or Tel Aviv, whether living in New York, London, Moscow or São Paulo, the same question keeps coming up: is the Israeli real estate market recovering or sinking? Data published between July and October 2026 gives a nuanced answer: it's doing both at once. New builds and resales are now following different trajectories, and understanding this gap changes the way one negotiates a purchase.

Spring: new builds rising, resales clearly declining

According to the Central Bureau of Statistics (CBS), reported by JFeed and TheMarker, 21,390 housing units were sold between March and May 2026, 10.6% less than the previous quarter and 5.7% less than a year earlier. But this average hides two opposing markets. Sales of new homes reached 8,910 units, up 8.2% year-on-year, while resales fell to 12,480 units, down 17.2% from the previous quarter. About 29% of new homes sold during this period came from subsidized housing programs.

At the same time, the stock of unsold new homes reached 84,130 units, equivalent to 28.9 months of sales at the current pace. Jerusalem had 10,368 and Tel Aviv-Jaffa 9,811. In other words: developers struggling to clear their inventory, and sellers of older properties struggling to find buyers.

A choppy summer

The following months were bumpy. In May, 8,246 homes were sold (+23% year-on-year), including 3,613 new ones (+51%) and 4,633 older ones (+7%). In June, volume climbed to 8,757 transactions (+50% year-on-year), with 3,593 new homes (+84%) and 5,164 older ones (+33%), while investor purchases reached 1,392 units (+64%). Then July cooled the enthusiasm: 7,692 homes sold, 12% less than in June and 4% less than in July 2025.

The July breakdown confirms the split: 2,968 new homes (+9% year-on-year) versus 4,724 older ones (-11% year-on-year). Investor purchases fell to 1,146 units, down 18% from June and 4% from a year earlier.

The state, the main pillar of new construction

One figure largely explains the resilience of new builds: according to the Times of Israel, subsidized housing programs accounted for 41% of new home transactions in July, up from 38% previously (a monthly measure, not directly comparable to the 29% quarterly figure cited above). The new-build market is therefore increasingly driven by buyers eligible for government programs, while the resale market depends more on open demand, which is more sensitive to credit costs and the security climate.

A diaspora buyer must check, project by project, the share of homes concerned and the conditions for accessing these programs, which rely on eligibility criteria set by the state.

What do prices say?

On the price front, the CBS recorded a 1% drop in April-May 2026, the sharpest in eight years according to the Times of Israel, followed by stabilization: +0.1% in May-June and +0.2% in June-July, for an annual decline of 1.2%. Regional disparities are notable: year-on-year, Jerusalem rose 1.1% and the Northern District 1.0%, while the Central District fell 3.2%. At the October 2, 2026 exchange rate (3.07 shekels to the dollar), an apartment priced at 3 million shekels comes to around $977,000.

Two other signals deserve attention. First, the Times of Israel notes that nearly 90% of the construction workforce capacity lost since October 7, 2023 has been recovered, which should support the pace of construction projects. Second, rents rose 4.4% year-on-year (May data, Times of Israel): useful information for any diaspora investor considering a purchase intended for rental.

What this means for a foreign buyer

For the non-resident buyer, this split is more of an opportunity than a risk, provided the right lessons are drawn. On the new-build side, the Jerusalem Post described in June more flexible developers and extended payment schedules, with buyers putting down 15 to 20% equity and paying the balance only upon delivery, sometimes years later. Faced with a stock of more than 84,000 unsold homes, there is room to negotiate, especially in cities with the largest inventories.

On the resale side, weak sales can open up pricing opportunities, but caution is required: an older property requires more thorough legal and technical verification. Our ultimate guide to real estate in Israel details the essential checks, from property registration to applicable guarantees.

A market to watch closely

The message from summer 2026 statistics is clear: there is no longer a single Israeli real estate market, but at least two, and the winner of any negotiation depends on what is being bought. For diaspora communities, this means weighing the visibility of a new build payable in installments against the potential discount of an older property.

To find out which segment matches your project, theImmobilier.co.il team supports you at every step, from abroad.