Housing market shift: 2023’s impact on buyers and contractors


In 2023, approximately 66,590 apartments (both new and second-hand) changed hands, marking a 35% decline compared to the previous year, as per a report released by the Central Bureau of Statistics. Of these, 42% were new apartments, totaling around 27,930 units, reflecting a 30.7% decrease from 2022. About 6,860 of these new units were sold with government subsidies, constituting a quarter of the new apartment sales.

By December 2023, the remaining stock of new apartments for sale reached approximately 67,760 units, with an average supply period of 27.5 months. This inventory surge contrasts starkly with January’s figures when only 52,850 units were available for a supply period of 21.2 months.

Some 30% of the remaining apartments for sale are situated in the Tel Aviv district (20,350 units), with 26% in the Central district (17,510 units). Among major cities, Tel Aviv-Yafo boasts the highest inventory with about 7,830 apartments, followed by Jerusalem with 5,470 units. Will this data pressure contractors to lower prices?

Meanwhile, 58% of total apartment sales comprised second-hand units, totaling around 38,660, marking a 37.7% decrease from 2022. An analysis reveals a consistent downward trend in sales since September 2021, with an average decline of 2.8%. Notably, the decline in second-hand sales surpasses that of new units, at 3.2% versus 2.7%, respectively.

The fourth quarter of 2023 witnessed the lowest apartment sales of the year, constituting approximately 18.4% of total annual sales. This represented a 33% decrease from the preceding quarter and a 36% drop from the same period in 2022. In this quarter, approximately 7,040 second-hand and 5,210 new apartments were sold. The onset of the Gaza War in October significantly impacted that month’s sales figures, which were the lowest of the year.

However, December experienced a recovery with 5,810 apartments sold, indicating a 44.5% increase from November. Seasonal fluctuations moderated these increases, showing a 21.5% rise in total apartment sales, with 44.8% and 7% increases in new and second-hand units, respectively.

The Southern district led in total apartment sales for 2023, accounting for 23% of the market. Over a quarter of new apartments (25.7%) and 21% of second-hand apartments were sold in this region. Following closely, the Central district saw 23.2% of new apartments and 20.4% of second-hand apartments sold. The Tel Aviv district experienced the most significant drop in new apartment sales compared to 2022, at 44.3%.

Similarly, Central, Southern and Tel Aviv districts saw around 40% declines in second-hand sales. Leading in new apartment sales were Jerusalem, Ashkelon and Netivot, while Haifa, Be’er Sheva and Jerusalem led in second-hand sales. Most settlements witnessed decreases in both new and second-hand sales, with a few exceptions including Sderot, Netivot, Afula, Kiryat Bialik, Jerusalem and Ashdod, which saw increases in new apartment sales.