Significant Drop in the Number of Residential Apartments Sold in Israel During 2025

Translation by SadaNews Economics - A report by the Israeli Ministry of Finance showed that the year 2025 represented the weakest year for Israeli contractors in the past two decades.

According to the report published by the Hebrew economic newspaper Calcalist, the total sales of new and used apartments reached approximately 85,000 apartments, marking an 11% decrease compared to around 95,000 apartments in 2024.

The report, as translated by SadaNews Economics, indicated that this figure was a result of decreased sales by contractors compared to between the two years and the stability in sales of used apartments, leading to a 25% drop in sales compared to the previous year.

The site notes that some apartment sale transactions occur within government programs, which are guaranteed as buyers receive financial support from the "Israeli state" amounting to hundreds of thousands of shekels; excluding these transactions, it is evident that contractor sales have decreased by 34% compared to 2024.

This is clearly demonstrated in the December 2025 data, where contractors sold 3,496 apartments, down 41% compared to December of the previous year. In comparison with the previous month, November 2025, there was a 20% increase, due to construction companies, especially those listed on the stock exchange, striving to improve performance as the year drew to a close.

It was noted that excluding the price of a single tenant and the targeted selling price, contractors sold only 2,504 apartments in December, representing a 44% decrease compared to December 2024.

Overall, construction companies managed to sell 22,415 apartments in 2025, which is 34% lower than the previous year. The site references data from the Israeli Ministry of Finance, translated by SadaNews Economics.

Calcalist reported that the number of apartments sold by contractors in 2024 was among the highest rates in the last twenty years, with around 35,000 deals signed that year for the purchase of new apartments.

The Bank of Israel raised concerns for contractors in 2025 by imposing financing deal restrictions, consisting of a down payment not exceeding 20% of the apartment price, and paying the remaining amount only upon receiving the keys. These restrictions came into effect in April 2025, leading to a decrease in contractor sales.

In March 2025, just before these restrictions took effect, about 50% of transactions were part of government financing operations, with the percentage of apartments sold financed at 24% in November, but it jumped to 32% in December of total transactions, indicating the difficulty of selling apartments for contractors.

The site states: this figure is strange and calls for a study by the Bank of Israel, as the restriction imposed allows financing for up to only 25% of the apartments sold in the project.

It is evident from the Israeli Ministry of Finance report that the value of benefits in practical terms is much greater than what is announced, and there are several possible explanations for this: first, contracting companies offer benefits that they are not obligated to report, but which are worth hundreds of thousands of shekels; second, contractors have another way to evade reporting, which is obtaining loans from insurance companies not subject to Bank of Israel oversight; and there is also a possibility that some companies do not report all contracts that include financing operations.

The Bank of Israel has imposed restrictions on financing operations out of fear that buyers may be tempted to conclude deals due to the low amount required at the time of signing the contract, which ranges between 10% and 20% of the apartment price.

Despite this, apartment prices witnessed a decline over the past year, and this situation may lead to a wave of deal cancellations, buyers facing debt issues with contractors, and contractors incurring debts to the bank and unsold projects. This is also mentioned by the Hebrew newspaper, translated by SadaNews Economics.

A report prepared by the chief economist at the Ministry of Finance and published in January of this year revealed early signs of a phenomenon that may turn into a problem, as it showed that among all new apartment purchase transactions signed in 2023, 1,300 transactions were canceled by January 2026, representing 3.6% of total transactions.

The cancellation rate in Beersheba was 6.5%, indicating that among every 100 apartments in transactions reported by contractors in Beersheba, 6.5 apartments were canceled, all of which were individuals who had paid only between 10% and 20% of the apartment price, and as the payment deadline approached, they found they were unable to pay the remaining amount.

The site notes that in 2025, contractors in Beersheba achieved the highest apartment sales, with 4,053 apartments sold, while the central region (Jerusalem and Tel Aviv) ranked second with 3,371 apartments sold, a difference of 682 apartments. The number of transactions that will be canceled will only be known after a year or two.

While contractors face difficulty selling new apartments, the situation in the used real estate sector remains relatively stable.

In 2025, 52,333 apartments were sold, showing a slight increase of 0.6% compared to 2024, and this level of transactions likely continued after sellers showed flexibility in prices. Meanwhile, contractors are doing their utmost to attract buyers, but they are not in a hurry to take the necessary step and lower the sale price.