The Israeli residential real estate market in 2024–2025 is showing mixed dynamics: after a period of price growth and increased activity in the post-COVID years, the market has seen a drop in the number of transactions and a decline in interest from foreign buyers.
According to data from Israel’s Central Bureau of Statistics, in June 2025, the number of housing transactions fell to its lowest level in 20 years.
The decline in foreign investor activity was particularly noticeable, falling 37% compared to the same period last year, while net purchases fell 42%.
The average cost of housing in the second quarter of 2025 was 2.27 million shekels (about $672,000), which is 2.5% lower than a year earlier. Taking inflation into account, the decline was 5.6%, the largest since 2007. At the same time, prices rose by an average of 5.1% on an annual basis. Some major centers saw declines: Tel Aviv by 4.2% and Jerusalem by 0.5%.
Despite their relatively small share of the total volume of transactions, foreign buyers continue to have a noticeable impact on the market. In 2024, they purchased about 1,900 residential properties, which is 50% more than a year earlier. At the same time, foreigners contributed about 432 million shekels in the form of tax on investment properties, which accounted for 15% of all revenues from this tax, with their share in transactions at about 10%.
The most active groups of foreign buyers remain citizens of the United States, France, Russia, and Ukraine, with interest also noted from investors from Canada and the United Kingdom. Most foreign transactions are recorded in Jerusalem, which accounts for about 55% of purchases, as well as in Tel Aviv and coastal areas. Experts note that foreigners mainly purchase expensive real estate, which supports the premium segment of the market. At the same time, the mass segment continues to adjust under the influence of high housing costs and reduced affordability for the local population.
According to forecasts, by the end of 2025, the share of foreign buyers will be 6-8% of all transactions, and further price dynamics will depend on the balance of supply and demand in the country’s key markets.
“Although overall interest in the Israeli market remains high, many foreigners are now holding back due to high interest rates and instability — some of the transactions observed are not immediate, but rather serve as a safety ‘reserve’,” says real estate agent Kim Bash.
