In the past year, a 7% decline in construction starts was recorded in Israel, with about 76,000 apartments built between June 2025 and July 2026, compared to nearly 82,000 apartments the previous year. This marks the first decline in three years, following a period of record construction starts. In the second quarter of 2026, 17.8 thousand apartments were built, a decrease compared to previous quarters. Despite the decline in construction starts, a 2% increase in building permits was recorded, with about 83,340 permits issued during that period. The gap between the data indicates that the issue lies not in the planning stage but in the execution stage, likely due to high financing costs following interest rate hikes and a slowdown in sales. Jerusalem experienced a significant 30.1% decline in construction starts, while Tel Aviv enjoyed a 205% increase thanks to new projects. Other cities like Beit Shemesh and Ashdod experienced sharp declines, raising concerns about future housing supply.