Land: the tap is closing while 85,000 homes wait

For a diaspora Jew dreaming of an apartment in Israel, one figure is reassuring: more than 85,000 new homes are waiting for buyers. Another worries specialists: the state is selling less and less land to build new ones. Both facts coexist, and it's their timing gap that matters for anyone buying today.

35,143 homes in nine months, versus 91,993 in 2025

The Israel Land Authority (ILA) measures the supply of public land by the number of housing units covered by its tenders. Figures published in late September 2026 show a sharp drop: more than 107,000 homes in 2022, 93,456 in 2023, 113,197 in 2024, 91,993 in 2025, then only 35,143 from January to September 2026. This total represents less than half of last year's full-year figure, and even falls below the 2020 level (50,622).

Another indicator points in the same direction: tender results were published for 99 plots in the first half of 2026, compared with 268 a year earlier and 743 in the first half of 2022, according to Yesodot Group as cited by Buy It In Israel.

Why developers are no longer buying

The causes cited are well known: high unsold stock reducing the need for new land, financing costs making developers cautious, military and political uncertainty, leadership changes at the ILA, and municipalities having to fund roads and schools before opening new neighborhoods. In other words, the contraction is not solely the state's choice: it is also the response of a sector struggling to sell what it has already built.

The paradox: a record number of construction sites

Paradoxically, never have so many homes been under construction: 217,200 at the end of June 2026, a record, up 8% year-on-year, according to International Investment. About 38,000 homes broke ground in the first half of the year, and permits were issued for 37,000 more. But completions fell 9.7% in the second quarter compared with the first, and unsold stock reached 85,682 new homes at the end of August (Central Bureau of Statistics, via Buy It In Israel), or nearly 27 months of sales.

The same trend applies to urban renewal: renovation permits fell by about 20% in 2025 compared with 2024, according to the Government Authority for Urban Renewal, even as plan approvals reached record levels.

Demand remains weak

On the demand side, August 2026 saw 7,532 apartments sold (-1% year-on-year, -2% month-on-month), according to Finance Ministry data reported by the Times of Israel. New homes, including subsidized ones, rose 6% year-on-year to 3,362 sales, while resales fell 7% to 4,170. Investor purchases reached 1,077 (-2% year-on-year). The picture is one of a market in waiting mode: few sales, lots of stock, and increasingly scarce land.

Timeline: the effect will be felt in three to four years

Construction takes an average of 32 months and obtaining a permit around three years, the Jerusalem Post noted in January 2026. Land unsold today will therefore not yield homes for several years. For the rest of 2026, the ILA's schedule plans for 422 procedures, but only 70 are open, covering 9,187 homes. In December 2025, 61 tenders covering nearly 30,000 homes had been finalized. The ILA expects more land to come in 2027.

And prices today?

In the short term, the market remains on a downward trend. Prices fell 0.6% in July-August 2026 compared with the previous two months and 1.8% year-on-year (Central Bureau of Statistics, via the Times of Israel). According to Globes, the decline since the early 2025 peak reaches about 3.3%, or nearly 80,000 NIS (around 25,700 USD) on an average apartment. The Bank of Israel kept its rate at 3.25%; the shekel trades at around 3.11 NIS per USD.

International Investment, which publishes these figures, notes that the slowdown has not yet caused a shortage, but that it could weigh on the market in the longer term. A rise in prices would be a possible consequence, not a certainty: current stock can absorb demand for a while.

What the construction figures show

The Jerusalem Post noted in January 2026 that about 81,000 homes broke ground between October 2024 and September 2025, 31.5% more than the previous year. So the machine ran at full speed in 2025; it is the upstream land supply that is slowing down today. For the diaspora, this means that deliveries over the next two years are already largely committed, while those of 2029 and beyond will depend on today's tenders.

What this changes for a diaspora buyer

Buying in a market where immediate supply is abundant and future supply is tightening opens a negotiating window: payment terms, discounts, and project selection are currently favorable to buyers. But timing matters. An off-plan purchase delivered in three years will arrive on a market where supply could be scarcer; a resale purchase plays out on today's market. To compare options, consult our ultimate guide to real estate in Israel.

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