Housing market at a low: Nearly half of contractor sales included financing benefits

The Israeli housing market continues to weaken: about 5,400 transactions in September, an 11% decrease compared to last year. The second-hand market dropped by 16%, while contractors maintain stability through financing benefits – 45% of transactions included such a benefit, a record since the Bank of Israel restrictions. Investors reduced purchases by a third, while young couples remained stable.

The Israeli housing market continues to weaken. According to a new review by the Chief Economist's Department at the Ministry of Finance, about 5,400 transactions were conducted in the free market in September – an 11% decrease compared to last year, and one of the lowest levels for this month since the early 2000s. The High Holidays affected the data but do not explain the full decline. The hardest hit was the second-hand housing market, with a 16% drop, particularly notable in Netanya, Tel Aviv, and the center. Sales of new homes remained almost unchanged, but behind this stability lies a surge in financing benefits offered by contractors: 45% of transactions included such a benefit – the highest rate since the Bank of Israel imposed restrictions in March 2025. A prominent example is Ofakim, where 129 new apartments were sold in September, about half of the total for the previous eight months, and 89% of transactions included financing benefits. Investors reduced purchases by nearly a third, the sharpest decline among all buyer groups. Home improvers also reduced activity. In contrast, first-time homebuyers remained stable, and in Jerusalem and Haifa they even increased purchases. A larger share of contractor sales moved to the periphery, and the potential revenue from new home sales dropped by 21% compared to last year.