In the Israeli real estate market, particularly in Tel Aviv, a decline in apartment prices is observed, with a 2.3% decrease in prices in the city, alongside a more moderate decline in Jerusalem. The main reason for this decline may be the reduction of financing incentives offered by developers, leading to a real price drop, especially for second-hand apartments. In the new apartment market, incentives still exist, but to a lesser extent, making it difficult for developers to maintain high prices.
Despite the decrease in mortgage rates, buyers are not rushing back into the market, and sales volumes remain low. At the same time, the volume of mortgages has increased, but these are transactions that matured after a long period. The inventory of unsold apartments stands at about 84,340 apartments, and developers are considering shifting some of the supply to rental housing, but face refusal from the Ministry of Finance. If the current trend continues, we may see price declines in other areas of the country.