What Happened in 2025: A Year of Pressure and Tentative Shifts
Anyone watching Israel's real estate market in 2025 witnessed a complex story. The Central Bureau of Statistics recorded eight consecutive months of price declines — the longest such streak in years — ending with a paper-thin nominal gain of just 0.4% for the full year. In real terms (net of inflation), prices fell approximately 4% from their 2024 peak. The Tel Aviv district, encompassing most of Gush Dan, took a 2.8% hit. Major cities like Netanya, Petah Tikva, and Rishon LeZion saw sharper declines of 6-7%. Even Tel Aviv itself saw 4-room apartments fall roughly 15% from peak prices.
Three main forces drove this cooling: a high interest rate (peaking at 4.5%) that constrained buyers' borrowing capacity, prolonged security uncertainty since October 2023, and a record inventory of ~83,000 unsold new apartments. Yet a full price collapse never materialized. December 2025 saw a 0.7% monthly rise, with November-December combined at 0.8% — clear signs the market was searching for a floor.
- 8 consecutive months of price declines — the longest streak in recent Israeli market history
- Tel Aviv: 4-bedroom apartments fell ~15.5% from peak; 5-bedroom units down 21% — back to 'one million per room'
- Outer Gush Dan cities (Netanya, Petah Tikva, Rishon LeZion): declines of 6-7% in 2025
- Jerusalem and the South bucked the trend: +6.3% and +2.3% respectively; the North rose 7.4%
- Annual transaction volume fell ~14% year-over-year — 2025 was a year of waiting
Why 83,000 Unsold Apartments Didn't Crash Prices — The Paradox Explained
One of the most confusing aspects of Israel's 2025 real estate market: with unsold inventory at a historic high of ~83,000 units, why didn't prices collapse? The answer lies in a financial mechanism that became widespread: the 20/80 deal. Buyers pay 20% at signing, with the remaining 80% due only at handover — two to three years later. This effectively means the developer is financing 80% of the purchase price at near-zero interest, hiding a real discount of 10%-15% from the official listing price.
Another critical nuance: 86% of those 83,000 unsold apartments are still actively under construction — meaning they're not 83,000 ready-to-move-in units sitting empty. Only about 11,500 completed apartments went unsold (Tel Aviv alone held ~11,000 units representing five years of supply). The real takeaway for buyers: meaningful negotiating room exists with developers — but you need to know how to use it.
- 20/80 financing deals hide a real discount of 10-15% — ask for them specifically, they're rarely advertised openly
- 40-50% of new apartment transactions in the open market now involve special financing arrangements
- Only ~11,500 completed unsold apartments actually exist — less than 14% of the headline inventory figure
- In Tel Aviv specifically: 5-year supply of completed unsold units — strong buyer leverage in that market
- Developers prefer giving upgrades (balcony, parking) over cutting official prices, to protect project-wide valuations
2026 Forecast: What Economists Predict and What It Means for Ono Valley Buyers
The consensus among Bank of Israel economists, S&P Maalot analysts, and most investment managers: 2026 will be a turning point. First half — stabilization with possible slight further declines; second half — moderate price increases of 3%-6%, primarily in high-demand areas. The Bank of Israel cut its rate to 4% in January 2026, then held steady in February due to geopolitical uncertainty (Iran threat). However, the Research Division still forecasts reaching 3.5% by year-end, which would bring the prime rate down to 5% — translating to savings of 300-500 NIS per month per 1 million NIS in mortgage.
In the Ono Valley — Kiryat Ono, Ganei Tikva, Givat Shmuel, Yehud — the picture has unique local dimensions. The Purple Line light rail will link Kiryat Ono to central Tel Aviv with 43 stations. Research on the Red Line's impact shows that proximity to light rail stations drives 10%-25% price premiums. Projects like Ono Park (1,450 new units), the city's socioeconomic cluster 9 ranking, and ambitious urban renewal plans point to durable long-term demand in this sub-market.
- Bank of Israel rate: 4% (Feb 2026); Forecast: 3.5% by Dec 2026 — each 0.25% cut saves ~300 NIS/month per 1M NIS mortgage
- Purple Line light rail: will connect Kiryat Ono to Tel Aviv — stations historically drive 10-25% price premiums
- Ono Valley: ~80,000 residents today, master plan targets 150,000 — strong demographic growth pipeline
- Red-hot rental market: new rental contracts up 6% in January 2026 — strong yields for patient investors
- 132,000 families on the discounted apartment waitlist — pent-up demand that will flood the open market at once
Current Prices and Market Data: Gush Dan and Ono Valley
For sound financial decisions, you need real numbers. In Kiryat Ono, a 4-bedroom apartment currently runs 3.0 to 3.3 million NIS in the open market; 5-bedroom units cost 3.4 to 3.7 million NIS. Price per square meter: 30,000-34,000 NIS. Monthly rental rates: 4-bedroom apartments approximately 7,500 NIS; 5-bedroom units around 8,050 NIS. Rental yield: 2.5%-2.7% annually — modest but stable.
In Ramat Gan, a new 3-bedroom apartment from a developer ranges from 2.75 to 3.6 million NIS (yield ~2.77%). In Givatayim — a small city with persistently high demand and limited new supply — prices are broadly similar to Ramat Gan. Key context: the Tel Aviv district recorded a 2.8% decline in 2025, meaning today's buyers are entering at meaningfully more rational prices than the 2024 peak.
- Kiryat Ono: 4-bedroom apartments — 3.0-3.3M NIS; rental 7,500 NIS/month; yield 2.5-2.7%
- Ramat Gan: new 3-bedroom from developer — 2.75-3.6M NIS; yield ~2.77%
- Tel Aviv district (Gush Dan): -2.8% in 2025 — rare entry window compared to 2024 peak
- Discounted apartment program (Kiryat Ono): 4-bedroom at ~1.84M NIS — but only 1 in ~18 applicants wins
- Givatayim: high demand + limited new supply = stable prices even during the broader correction