Tel Aviv Property Index · Costs

Building costs are rising while prices fall

For most of the last decade, construction costs and apartment prices moved together. They have come apart. Inputs rose 3.7% in the year to June 2026 while prices fell 1.5% and new-build fell 3.9% — a squeeze of around five points a year, and the single most useful fact for anyone buying off-plan or negotiating with a developer.

+3.7%construction inputs, year to June 2026
−1.5%apartment prices, year to May–June
−3.9%new build prices, same period
~5ppannual squeeze between the two

Two lines that used to move together

The input index measures materials, site wages and equipment. It rose through the year to June while the price of the finished product fell. Excluding wages the input index was flat in June — site wages rose 5.5% and concrete fell — so the cost pressure is now mostly labour, which does not unwind quickly.

Figure 1 — annual change, costs against prices

The scissors, opened Annual change in what it costs to build against what apartments sell for Construction inputs year to June 2026 +3.7% All apartment prices year to May–June 2026 −1.5% New build prices year to May–June 2026 −3.9% A squeeze of roughly five points a year between cost and price. It explains the financing promotions, the subsidy share and the rise in cancellations.

And the fall is not evenly spread

The national number hides a 4.6 point spread. Prices rose in the north and Jerusalem over the year and fell hardest in the centre, Haifa and Tel Aviv — which are also the districts carrying most of the unsold new-build stock. Where the overhang is, the price is moving.

Figure 2 — annual price change by district

A 4.6 point spread between districts Annual change in apartment prices, year to April–May 2026, against a national −2.0% North +1.4% Jerusalem +0.3% South −0.5% Tel Aviv −2.5% Haifa −2.6% Centre −3.2% Treat the annual figures as signal and two-month district swings as weather. The May–June district moves invert completely, on samples too small to mean much.

A note on the number everyone quotes wrongly

There is no official quarterly house price figure in Israel. The published index is a two-month rolling one, about six weeks in arrears, so three overlapping readings touch any given quarter. Multiplying them together is a common error in Israeli property commentary and it always exaggerates the move, because it counts the middle months more than once.

The honest quarterly proxy is the twelve-month comparison, which does not overlap itself. That is the number used throughout this site.

Figure 3 — the rolling readings, two-month and annual

Why there is no such thing as a quarterly price number CBS publishes a two-month rolling index, roughly six weeks in arrears −2.2% −1.5% −0.9% −0.2% +0.5% Feb–Mar Mar–Apr Apr–May May–Jun Two-month change +0.1% Annual change −1.5% Three overlapping readings touch any one quarter. They must not be multiplied. Compounding them counts April twice and May three times, and always exaggerates the move.

What to do with it

Where the squeeze shows up in a negotiation

  • Ask what the developer's cost base is doing. A developer whose costs are rising 3.7% while their sale prices fall has a reason to close, and a limit to how far they can discount.
  • Expect terms, not price cuts. Financing promotions and payment holidays cost a developer less than a headline price reduction, which reprices every unsold unit in the block.
  • Watch the linkage. Roughly 40% of an off-plan price can ride an index that is climbing while the asset itself drifts down.
  • Check the cancellation rate. It rises in exactly this configuration, and a scheme losing buyers is a scheme with room to talk.

Method

Both series are published by the Central Bureau of Statistics. The apartment price index is a two-month rolling, quality-adjusted index built from transactions reported to the Tax Authority; the construction inputs index is monthly.

All price data is provisional. Late-reported transactions revise it for several months, so the two most recent readings in any series will move.

CBS apartment price index and residential construction inputs price index, readings published 15 May, 15 June, 15 July and 14 August 2026. Tel Aviv Property Index. Figures are recomputed on each data release; the date above each chart is the vintage shown. Provisional Tax Authority reporting is revised for several months after a quarter closes, so the two most recent periods in any series will move. This page is market information, not advice on any particular property or transaction.