Two years of war and ongoing uncertainty have not stopped Israelis from pursuing their dream of homeownership. Even reports of a slowdown in new apartment sales have done little to change the overall trend. Israelis want a home – and they want it now. The noise surrounding the real estate sector over the past year can be misleading. Media headlines may suggest that sales offices at construction sites are empty, but mortgage activity in the first ten months of the year tells a very different story.
By the end of 2024, total mortgage volume reached 94 billion shekels, and projections for 2025 indicate an impressive annual total surpassing 100 billion shekels. The gap between headlines and actual performance remains unexplained. In reality, the main factors shaping Israel’s housing market in 2025 have not changed much: demand stays high, the supply of new homes has not significantly increased, and Israel’s population continues to grow rapidly. This imbalance keeps the market under constant pressure.
The housing sector knows how to adapt, and developers are making great efforts to sell units. While asking prices might not officially fall, it’s well known that developers offer substantial incentives, such as attractive financing packages and flexible payment plans, without formally lowering prices. The market is also benefiting from increased interest among foreign buyers – Jews abroad exploring the option of purchasing a “safe” property in Israel. More and more Jews living overseas are visiting the country to consider buying at least one apartment for themselves or their families. Demand from international residents is growing partly due to the global rise in antisemitism. But can we definitively say where the market is headed? Not yet.
Mortgage data paints an optimistic picture, but it’s still early to draw firm conclusions. The mortgage market continues to advance, supported by strong demand, limited supply, and eager developers. Investors have not pulled back, and interest among Jewish buyers abroad continues to increase, further boosting momentum. A potential interest-rate cut, possibly as early as late November, could trigger further positive moves in the housing market, encouraging renewed growth in demand and perhaps in prices as well.
Dror Feldman is the Deputy Head of the retail Division and Mortgage Sector Manager of Mizrahi-Tefahot Bank.
The above is for information only and does not constitute an offer to provide a loan.
Written in collaboration with Mizrahi-Tefaot