Israel's real estate market sent a mixed signal this spring: new construction held its ground while the resale market absorbed a sharp blow, according to Central Bureau of Statistics data covering March through May, the most recent three-month window available.
Roughly 21,390 apartments changed hands nationwide during that period, a 10.6 percent decline from the preceding three months and a 5.7 percent drop from the same period a year earlier, figures independently confirmed by TheMarker's own analysis of the same government data.
The headline number obscures a market that is splitting in two. New apartments sold by developers, some 8,910 units in all, actually held essentially flat, edging up 0.4 percent from the prior quarter and climbing 8.2 percent year over year. Nearly 29 percent of those new units were sold through government subsidy programs, a reminder of how much of the new-construction market now depends on state support rather than open demand.
The resale market tells a different story. About 12,480 previously owned apartments sold in the same period, a 17.2 percent plunge from the prior three months. Since resales still make up the majority of transactions nationally, that decline did most of the damage to the market's overall numbers.
The unevenness shows up starkly at the city level. Jerusalem led the country in resale volume, with 847 transactions, even as that figure fell 16.3 percent from the previous quarter; new-construction sales in the capital dipped a more modest 4.6 percent, to 539 units. Ashdod moved in the opposite direction entirely, posting a 115.6 percent surge in new apartment sales, to 442 transactions, while its resale market slipped a comparatively mild 7.6 percent.
Two of Israel's largest Haredi population centers, Beit Shemesh and Bnei Brak, saw resale sales fall by roughly the same margin, 22.6 percent and 22.9 percent respectively. Elad's new-construction sales dropped 17.1 percent, while Netivot posted a smaller 2.7 percent decline in new units alongside a 10.3 percent drop in resales.
Perhaps the more consequential number for the market's medium-term trajectory is inventory. Roughly 84,130 new apartments nationwide remained unsold as of the end of May, equivalent to 28.9 months of supply at the current sales pace, a figure that underscores how much unsold stock developers are still sitting on even as prices in some areas have started to soften. Tel Aviv district holds the largest share of that inventory, with 25,390 unsold units, but at the individual city level Jerusalem tops the list, with 10,368 new apartments awaiting buyers, ahead of Tel Aviv-Jaffa's 9,811.
Taken together, the data suggest a market cooling primarily on the resale side, propped up on the new-construction side by government subsidy programs that are increasingly doing the work private demand once did. Whether that pattern holds, analysts caution, will depend heavily on where the broader economy and government housing policy head in the months ahead.
