The residential real estate market in Israel is characterized by a constant increase in housing prices and a relatively high demand for housing in the metropolitan area of Tel Aviv-Yafo. In 2022, the
amounted to over 2.6 million, which was a slight increase compared to seven years prior. However, in popular residential areas, the housing supply can be significantly limited, which leads to a greater price increase. Housing prices in Tel Aviv are the highest among the major cities in Israel. In the first quarter of 2023, the
reached over 4.2 million Israeli shekels (roughly 1.10 million U.S. dollars). This was more than double the
Trends in the residential real estate industry
In 2020, self-owned dwellings constituted Israel's
most common type of residency. In that year, over 1.8 million households lived in their own homes. However, an increasing number of Israeli citizens, especially young people, live in rented apartments. The main reason is the financial inability to purchase an apartment. In 2020, the number of
households that rented an apartment in Tel Aviv exceeded that of families that owned an apartment, and it stood at 110,000. This trend affects the apartment purchase market in many Israeli regions. In March 2023, the number of
new dwellings sold in the Central District amounted to 432, a decrease of percent compared to the previous several months.
International comparison
Israel often appears in international real estate comparisons, especially in the context of housing prices. The increase in residential real estate costs has occurred in several OECD countries, of which Israel is a member. In the third quarter of 2022, the
OECD countries' aggregate house price to income ratio stood at 126.8 percent, an increase of 27 percent compared to 2005. Furthermore, Tel Aviv received a high
real estate bubble index score of 1.59 points in 2022, one of the highest among the examined cities. This score meant that real estate prices rose disproportionately compared to Tel Aviv’s leading economic indicators.
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