Unsold Apartments in Israel Hit Record High of 79,408 Amid Slumping Sales

The number of unsold new apartments in Israel rose sharply in April, setting yet another record at 79,408 units, according to data released Sunday by the Central Bureau of Statistics (CBS). The 1.1% monthly increase—equivalent to 784 additional unsold units—highlights deepening stagnation in the country’s real estate market.

The rise comes alongside a 32.9% year-on-year plunge in contractor sales, with only 2,350 new apartments sold in April, a 26.8% decline compared to March. Second-hand apartment sales also slumped, with 6,280 total transactions recorded in April, marking a 24.6% drop from March and 19.8% from April 2024.

The inventory of unsold new apartments has been climbing almost continuously since April 2024, a trend fueled by growing challenges faced by developers in marketing properties. According to CBS, since March 2024 the unsold inventory has risen by approximately 12,400 units—an 18.5% increase.

Analysts point to restrictions imposed by the Bank of Israel on financing for new home purchases as a key factor slowing demand. These financing constraints, combined with an increasingly cautious buyer base, have made it more difficult for contractors to finalize sales.

Although some of the unsold inventory includes apartments under government-subsidized programs, where contracts with lottery winners have yet to be signed, industry sources say this represents a small fraction and does not significantly alter the broader market picture.

Inventory Now Equal to 27.8 Months of Sales

The current inventory of unsold apartments is equivalent to more than two years of sales at the present pace—27.8 months, according to CBS data. The recent escalation in the conflict with Iran is expected to further depress activity, especially as construction sites and sales offices have been temporarily shut down. The full impact is likely to be reflected in sales data for June and July, which are traditionally peak months for the housing market.

Tel Aviv:

• Remains the city with the largest inventory of unsold new apartments: 9,687 units

• Inventory declined slightly from March, down by 103 units

• However, new apartment sales in Tel Aviv plunged 44% from February to April, totaling just 553 units

Jerusalem:

• 7,777 unsold apartments in April

• Sharp monthly increase of 393 units

Bat Yam:

• Inventory reached 4,331 units, up by 239 apartments

• Worst-performing market in terms of sales: only 174 apartments sold from February to April

• Sales dropped 59% in the quarter

• Market heavily reliant on 10/90 financing models, which were hit hard by the Bank of Israel’s lending restrictions

Be'er Sheva:

• One of the few cities to record a decline, with inventory falling by 38 apartments to 1,006

Outlook: Mounting Pressure on Developers

With unsold inventory ballooning and contractor cash flow under strain, developers may soon be forced to offer steeper discounts, financing incentives, or delay construction starts. The CBS data suggests that Tel Aviv and Bat Yam, two of the largest urban markets, are especially vulnerable due to the combination of high inventory and collapsing sales.

As the summer months approach amid ongoing geopolitical tensions and economic uncertainty, analysts expect continued weakness in buyer activity, even in markets traditionally viewed as resilient.