In 2025, Israel's real estate market experienced a significant downturn, with only 84,900 homes sold, an 11% decrease from 2024. Developers were particularly hit hard, with a 44% drop in sales in December 2025 compared to the previous year. This market weakness is partially offset by the second-hand market, which maintained its activity level. Investors, drawn by lower interest rates, accounted for 18% of the market in December. Despite regulators and banks attempting to limit supply and boost prices, housing prices in cities like Herzliya, Tel Aviv, Ramat Hasharon, and Givatayim are expected to continue falling. Urban renewal projects have led to an oversupply, and many homeowners are selling their properties in anticipation of emigration. Prices could further decline by 30 to 40%, potentially leading to severe economic consequences, including increased unemployment and heightened pressure on the Israeli economy.
