Housing snapshot August 2026: Home prices fall 1%, largest drop in eight years

Israeli home prices experienced their largest monthly decline in eight years during April and May 2026, falling by 1% compared to the previous two-month period, according to the Central Bureau of Statistics. This marks a 2% average decrease compared to the same period last year, with prices falling in nine of the last twelve months. The slowdown is attributed to factors including the ongoing multifront war, high interest rates, a record supply of unsold new housing, and the shekel's strength against the dollar, which impacts foreign buyers. Prices declined across major cities like Tel Aviv (-2.3%) and Jerusalem (-1.8%). Despite the price drops, apartment sales in May saw a significant increase, with 8,246 units sold, a 23% rise from May 2025, largely due to low activity in April. Investor activity also surged, with a 43% increase in purchases compared to May 2025. Rental prices, however, rose by 4.4% over the past year, a trend economists attribute to a lagged reaction to interest rate increases.