New home sales down 28% in first half of 2025

For the past four consecutive months the home price index has fallen by an accumulative 1.3%. This is a major decline led by the Tel Aviv District, which has fallen 4.3% since February.

The number of deals completed in the first half of 2025 was down 14% compared with the first half of 2024. The decline in purchases of new apartments, was down 28%, while in second-hand apartments the decline was only 0.5%. However, an investigation by “Globes” found that there is a high variation between regions in terms of the decline in apartment purchases over the past year.

The most notable decline: new apartments

Just as the price declines did not affect the country equally, the decline in the number of deals was not distributed equally and in certain cities. The cities that stand out with exceptional declines in the first half of 2025 compared with the first half of 2024 are Ashkelon (down 30%), Petah Tikva (24%), and Beersheva (18%).

Ashkelon has been one of the cities in recent years with the highest number of new apartments built and sold, but its decline in new apartment sales did not begin this year. In 2021, it led the sales chart for new apartments, but sales gradually weakened and the city fell from its leading position in the following years. The supply of unsold new apartments in the city has also remained more or less at the same level for over a year, which shows that the construction and sales rates of new apartments have reached a kind of balance, although sales of new apartments have fallen by two-thirds.

Part of this was offset by an increase in the purchase of second-hand apartments, but overall the end result is a very large fall in the purchase of apartments in the city.

Beersheva has also seen a major fall in apartment purchases, relative to the first half of 2024, and again the main reason for this is the new homes market. The number of deals in the city fell 18%, but while the fall in second-hand apartments was 5%, new homes sales fell 52%.

Shai Stern of RE/MAX – Plus real estate agency in Beersheva says, “We feel it well and the numbers don’t lie. Ultimately, I think the name of the game is the high interest rate.” He believes that there are property owners in the market today who are willing to be flexible on apartment prices, while on the other hand there are investors who feel that this is the time to find opportunities, which is supporting the Beersheva market a little.

On new apartments, Stern says he agrees with Beersheva Mayor Rubik Danilovitz, who complains about tax benefits that residents of surrounding cities receive, which means people prefer to purchase new apartments or land lots in nearby Ofakim, and reduces demand for apartments in Beersheva. “According to the data we have, hundreds of families from Beersheva are preferring to purchase apartments in neighboring Ofakim, and of course this also affects the apartment transactions that are carried out in Beersheva.”

In Petah Tikva, just like in Ashkelon and Beersheva, there has been a painful fall in new apartment sales of 51%, while the number of second-hand apartments purchased actually increased by 5%. Several real estate professionals told “Globes” they had difficulty finding a concrete reason for the drop in sales of new apartments in the city. Unlike Ashkelon, there was no decline in construction starts in the city either, from the end of June 2024 to the end of June 2025, the supply of new apartments in the city increased by 50% to a record of 2,631 new unsold apartments. Only in Haifa did the supply increase by more..

“Over the past few years, Petah Tikva has emerged as a popular alternative in Gush Dan for young couples who can purchase apartments at reasonable prices,” says a well-known real estate professional, adding, “It is very likely that price levels in the city have risen beyond what many of them can afford today, and they are turning to purchase cheaper apartments in Rosh Ha’ayin and in urban renewal projects in Or Yehuda, for example.”

“People are waiting for the massive marketing in the Sirkin area, which may also be accompanied by more attractive prices,” said another source. One way or another, the new apartments market in Petah Tikva seems to be in a bad way.

Prices: No correlation to the number of deals

Another issue “Globes” examined is whether there is a correlation between the level of decline in the number of deals and the fall in home prices in the area. This was done by comparing average prices of four-room apartments purchased in the second quarter of 2025 to prices of four-room apartments purchased in the second quarter of 2024.

There was no correlation found. In Petah Tikva and Ashkelon, slight increases were found in the average apartment prices purchased in the second quarter of this year while in contrast, in Netanya, where there was a slight increase in the number of deals, and in Rishon LeZion and Haifa, where the fall in the number of deals was much more moderate than the three cities examined, price declines were bigger.

Published by Globes, Israel business news – en.globes.co.il – on August 31, 2025.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2025. .