The decline in prices in Israel’s home market has been persisting for some time. In the most recently published Central Bureau of Statistics' home price index, for May - prices fell 1% - the biggest monthly decrease for eight years.
A new study carried out by real estate appraiser Dr. Assaf Gastfreund shows that in two central neighborhoods in Tel Aviv, over the past three and a half years, home prices in the second-hand market have fallen very significantly. Dr. Gastfreund's examination presents the variation in apartment prices in two central neighborhoods in Tel Aviv-Jaffa - Rova 3 and Rova 4 (Old North). The study examined all second-hand deals between January 2023 and mid-July 2026 in both neighborhoods and examined the price differences between the periods.
There were 371 deals, 191 in Rova 4 and 180 in Rova 3, only homes that are more than five years old. "The analysis is based on the deal price per square meter, minus deals that were filtered out as exceptions," the study says. The price shown is a typical price per square meter, in median values. Rova 3 stretches from the Yarkon River in the north to Bograshov Street, Ben Zion Boulevard and Marmorek Street in the south, and from the sea in the west to Ibn Gabirol Street in the east. Rova 4 is bounded by Ibn Gabirol Street in the west, the Yarkon River in the north, the Ayalon Highway in the east, and Shaul Hamelech Boulevard in the south.
A 23.3% decline since the start of 2023
"Unlike the indices that are also based on deals of new apartments from the contractor, in which there are in most cases biases due to various benefits that are not reflected in the reported price, the study is based solely on second-hand deals, in which the reported price reflects the price actually paid," explains Gastfreund. "Financing benefits, upgrades, tenant changes, furniture promotions, exemption from indexation and more are not reflected in the price reported to the Tax Authority but have a significant impact on the real economic value of the deal. In second-hand apartments, there are no benefits of this type, and the reported price is the final and true price of the deal."
"The analysis was carried out using a median price, while filtering out unusual deals, to obtain as accurate and reliable a picture as possible of the price trend. The median is resistant to outliers and better describes the typical price per square meter.
"In the home market, the distribution is almost always asymmetric with a 'right tail' - a minority of particularly expensive deals that pull the average upwards, so the average tends to show a higher price than most buyers actually met. The median is also the accepted index in the Central Bureau of Statistics method and the housing price index, so presenting the median allows for direct comparison with official sources."
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The study segmented the price data by apartment size: In Rova 4, the median price of 40-60 square meter apartments fell from about NIS 65,300 per square meter at the start of 2023 to NIS 61,500 per square meter in 2026, a 5.8% fall; the median price of 60-80 square meter apartments fell from NIS 66,900 per square meter at the start of 2023 to NIS 56,962 per square meter in 2026, a 14.8% fall (the most significant of all apartment types in this district); in larger apartments, 80 to 100 square meters and 100 to 120 square meters, prices remained relatively stable and decreases were a few percent.
In Rova 3, central Tel Aviv, for 40 to 60 square meter apartments, the median price fell from NIS 72,600 per square meter at the start of 2023 to NIS 62,500 per square meter in 2026 - a 15.8% fall; for 60 to 80 square meter apartments - from NIS 55,871 per square meter at the start of 2023 to NIS 53,400 per square meter in 2026 - a 4.4% fall; for 100 to 120 square meter apartments - from NIS 70,370 per square meter in 2024 (there is insufficient data for 2023) to NIS 51,000 per square meter in 2026 - a 27.5% fall, but the number of deals examined in this category is low. The price for 80-100 square meter apartments remained stable.
In very small 20-40 square meter apartments, an increase was seen in both neighborhoods - but the number of deals during the period was quite small and does not allow for establishing a trend.
Based on all deals for second-hand homes in the neighborhoods since the start of 2023, in Rova 3 there was a 23.3% fall in the median price per square meter, and consecutive decreases in prices were seen from year to year. In Rova 4, there was a 7.75% fall in the median price per square meter since the start of 2023, despite a rise of about 1% in prices between 2024 and 2025.
"The two leading neighborhoods that were examined point to the same direction, a decline in prices, but to different degrees," writes Dr. Gastfreund. "Rova 3 saw a sharp and widespread price decline, Rova 4 showed a more moderate decline.
"In real terms and considering inflation during the period, the erosion of value is even more significant than the nominal numbers. The overall conclusion: the home market in these two central neighborhoods has been on a nominal downward trend since 2023. The decline crosses most area categories, with the exception of very small apartments, which remain stable."
Published by Globes, Israel business news - en.globes.co.il - on July 26, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.
