Apartment prices in Tel Aviv fell by more than 20% amid instability in Israel

Apartment prices in Tel Aviv have fallen by more than 20% on average over the past few years amid ongoing hostilities and political instability in Israel, while rental prices have continued to rise, Tel Aviv real estate agent Eitan Yaakobi told RIA Novosti.

Since October 7, 2023, when Israel was attacked by Palestinian Hamas militants, the country has experienced a period of military and political instability. At the same time, the cost per square meter in a new building in Tel Aviv still remains one of the most expensive in the region and can reach 18.1 thousand dollars.

“After October 7, the market experienced another powerful shock, and many buyers simply abandoned or postponed their plans to purchase real estate. Today, demand in Tel Aviv is significantly lower compared to the peak of the market in 2021. Prices on average have fallen by more than 20% for both new housing and the secondary market,” Eitan said.

According to him, the decline in prices and demand for real estate began even before the attack on October 7, 2023. This was mainly due to rising interest rates on mortgage loans, which made it difficult to purchase apartments and reduced the investment attractiveness of such transactions. Thousands of anti-government protests in Tel Aviv in 2023 also had a negative impact on the real estate market.

The realtor noted that all these factors, however, did not affect the cost of rental housing in the city, which has shown a slight increase in recent years.

In 2021, when demand was at its peak, apartments on the secondary market in the center of Tel Aviv were sold for approximately 55-60 thousand shekels (18.1-20 thousand dollars at the current exchange rate), while new apartments from the developer could cost 70 thousand shekels (23.1 thousand dollars) per square meter or more, the agency’s interlocutor recalls.

“Today, in 2026, I would estimate the cost of apartments on the secondary market at approximately 40-45 thousand shekels (13.3-14.8 thousand dollars) per square meter, and for new apartments from the developer - approximately 50-55 thousand shekels (16.5-18.1 thousand dollars) per square meter, of course, depending on the location, condition of the apartment and the quality of the property,” the real estate specialist noted.

Eitan described the current state of the Tel Aviv real estate market as a "buyer's market" with relatively low demand and forced pricing flexibility on the part of sellers.

On October 7, 2023, Israel suffered an unprecedented attack from the Gaza Strip. The Hamas attack, which killed more than 1,200 Israelis and took 250 hostages in just one day, triggered a ground operation by the Israeli army in the Gaza Strip that has now left the Palestinian enclave almost completely destroyed and more than 70,000 Palestinians dead.