Tel Aviv market note · September 2026
Four markets, one city. The index is down. The average cheque is not.
CBS quality-adjusted prices in the Tel Aviv district have slipped. The average flat that actually traded in the city of Tel Aviv has not. New-build stock is heavy. Prime second-hand streets still clear. Those four facts are the whole story. The charts below use the same non-overlapping CBS anchors as the value tracker — not rolled two-month prints stacked on top of each other.
The like-for-like home is not the average sale
CBS’s quality-adjusted dwelling index tracks a given home. It is the series that answers “what is this flat worth.” From a common 100 in 2021 Q2, the national path peaks in 2024 Q4 and is now slightly off that high. Tel Aviv district ran hotter through 2022, took a harder 2023 (−3.7% on the Bank of Israel district annual), bounced in 2024, then printed its first down year in six years in 2025. May–June 2026 is still −1.7% on the year.
That is not what the average cheque says. In Q2 2026 the city average transaction was ₪4.55 million, up about 8.4% on a year earlier. A four-room flat in the city cleared over ₪5 million. Herzliya four-room ~₪3.43m, Ramat Gan ~₪3.07m. The gap is mix: more new, larger, mamad-equipped stock in the sold sample, fewer cheap second-hand deals.
Both series start at 100 in 2021 Q2. Quarters between published year-end / y/y anchors are geometric interpolation. Do not quote an interpolated quarter as a CBS print. Five-year national Q2-on-Q2 is +30.6%, the CBS all-dwellings figure.
The country is not moving as one district
May–June 2026 versus the same window in 2025: Jerusalem and the North are still up. The Centre is the problem child at −4.1%. Tel Aviv district sits with the national print, a little weaker. If you only read “Israel is down 1.5%,” you miss that a flat in Modiin and a floor in Nachlaot are not in the same cycle.
Source: CBS May–June 2026 district y/y, quality-adjusted. Tel Aviv here is the district, not the municipal boundary.
Inside the city, second-hand already took the cut
A deal-level study of second-hand sales from January 2023 to mid-July 2026 (371 transactions, flats older than five years) is the useful street-level chart. Lev HaIr (Rova 3) median shekels per metre is down 23.3%. Old North (Rova 4) is down 7.8%. The 60–80 m² band in Rova 4 — the classic oleh three-room — fell 14.8%. Large units held up better. In real shekels, after CPI, every one of those cuts is deeper.
South and east of the city did not fall the same way in 2024–25. The premium of a Tel Aviv four-room over the rest of the country has been shrinking since 2023. That is the stock most foreign buyers actually bid on: older 3–4 rooms without a contractor campaign behind them.
New-build is the overhang. Rates are not the story.
Bank of Israel has been cutting, toward 3.5% by July 2026. Money is cheaper. Prices still slip because supply is the constraint, not the last 25 basis points.
- City of Tel Aviv: about 9,500–9,800 unsold new flats.
- Tel Aviv district: about 25,300–25,400 unsold new flats — roughly 30% of the national pile.
- At spring sales pace that was ~51 months of district supply against ~29 months nationally.
- Starts in the city still ran hot: ~7,100 dwellings begun in the year to March 2026, +23%.
Developers have been buying volume with financing deals, not sticker cuts. May 2026 new-home sales in the city jumped on campaigns; second-hand volume in the same city printed one of its weakest two-year readings. About 70% of Tel Aviv buyers who cancelled — usually a permit condition that never arrived — did not buy another flat. That is demand stepping out, not rotating.
CBS stock of new dwellings remaining for sale, months of supply at then-prevailing quarterly sales. National inventory peaked near 86,090 at end-2025 and has been roughly stable since.
Luxury is thin, not cheap. Rent is the other market.
Q1 2026: only 20 deals above ₪15 million nationwide, a four-year low. Average luxury ticket down (₪18.3m versus ₪21.4m a year earlier), shekels per metre up 22% to about ₪87k — fewer villas in Herzliya and Caesarea, more compact prime apartments in Tel Aviv and Jerusalem. Aviv’s Herbert Samuel tower: 20 sales through end-2025 at ₪128–145k/m², zero sales in the first half of 2026. The foreign bid for that band has not come back in size. Treat glossy “luxury is up 9% YTD” notes as a different market from CBS.
Rent is the split screen. Housing-services inflation is still running near 3.5% while sale prices fall. Empty flats in core Tel Aviv are scarce. Class A offices: Begin / Sarona / Yigal Allon firmer and the city near 99% occupancy; Rothschild / Ahad Ha’am softer. That supports some live-work demand in the east. It does not set the asking price of a Rova 4 three-room.
| Slice | What it is doing | Who feels it |
|---|---|---|
| Like-for-like value, district | Soft, about −2% y/y | Anyone quoting “the market” |
| Average cheque, city | High, mix-driven, ₪4.55m in Q2 | Headlines, not valuations |
| New-build, city and district | Buyer-leaning, long inventory | Negotiate on terms and financing |
| Prime resale · Old North, Neve Tzedek, Ramat Aviv | Tighter than the index | Terms more than a crash |
| Lev HaIr second-hand | Already marked down hard since 2023 | The 60–80 m² band especially |
| ₪15m+ waterfront | Thin bid, foreign bid missing | Developers eating carry |
| Renting in the core | Still a landlord’s market | Yield vs vacant months |
Price paths use the CBS quality-adjusted dwelling-price index, rebuilt from non-overlapping anchors (Q4-on-Q4 and the published 2026 y/y windows). A national or district index is not a valuation of any particular property and ignores purchase tax, betterment, fees, financing and rent. Average transaction prices move with the mix of what sold. Months-of-supply figures move with the last quarter’s sales pace. Neighbourhood ₪/m² cuts are Gastfreund’s second-hand sample, not CBS. Nothing here is advice on a transaction.
Figures current as of the May–June 2026 CBS dwelling-price release and Q2 2026 average-price tables. Next CBS two-month window due mid-September 2026.