The Tel Aviv residential real estate market is becoming more cut off from the rest of the country. Deal prices in the city broke records last quarter and are even moving further away from nearby affluent cities. In addition, while buyers around the country are buying less new apartments, in Tel Aviv buyers have actually flocked to them - and in contrast, the interest they are finding in second-hand apartments is decreasing.
Data from the Central Bureau of Statistics and the Ministry of Finance Chief Economist, published last week, reveal a market that is, on the one hand, treading water at lower prices, but also in which social gaps are widening.
The price of a 4-room apartment (new and second-hand) in Beersheva has reached NIS 1.3 million on average since the beginning of 2024, and there have been no significant changes since then. The price of an average apartment in Tel Aviv is four times higher than that in Beersheva, and this ratio is creeping upward. Nine years ago, this Tel Aviv apartment "only" cost three times as much.
Most of the increase due to the new apartment market
But Tel Aviv is not only moving away from Beersheva but also from Jerusalem (a 4-room apartment in Tel Aviv costs 1.6 times as much as an apartment in Jerusalem) and Haifa (2.7).
Even compared to neighboring, affluent cities, Tel Aviv is on a different planet in terms of prices. A comparison with the prices of average 4-room apartments in Ramat Gan and Herzliya shows that while in both cities apartment prices have decreased in recent quarters, in Tel Aviv they continue to soar to NIS 5.2 million. The price of a 4-room apartment sold in Tel Aviv in the second quarter of the year is almost 50% higher than the price of such an apartment in Herzliya (NIS 3.43 million) and almost 60% higher than the price of such an apartment in Ramat Gan (NIS 3.07 million).
A closer look at the data also reveals that there is a fundamental difference in the purchase patterns in the three cities. The markets in Ramat Gan and Herzliya are operating like in most major cities, and most deals are for second-hand apartments. However, in Tel Aviv we are seeing a relatively new trend in which the absolute majority of deals are for new apartments. Last quarter, this majority reached a peak, when 72% of the apartments purchased were new. The trend began in 2024, when there were reportedly two sources for this: the demand by buyers for safe rooms in apartments following the war, and the financial deals offered by developers.
From this it can be understood that the main increase stemmed from the new apartment market. Last quarter, more than 1,200 apartments were purchased in Tel Aviv, 50% more than in the first quarter. In contrast, the lowest number of deals in second-hand apartments was recorded in the last two years.
The result is that the supply of new unsold apartments in the city has dropped to its level from 18 months ago (about 9,500 apartments), but is still at a very high level, in second place after Jerusalem.
Published by Globes, Israel business news - en.globes.co.il - on August 17, 2026.
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