Overtaking Tel Aviv: The city where a private house costs over 8 million shekels

Single-family homes have become a unique and rare commodity in the housing market. The primary reason is the shortage of land in Israel. According to the Planning Administration, the focus in the coming years will be to limit tenders for private construction in favor of high-density housing to meet the country's needs. Despite a current decline in demand, it is anticipated that as interest rates fall, the gap between supply and demand will widen, potentially driving prices higher.

Single-family homes behave differently than other property types. Due to their scarcity, they maintain their value, and in some areas, even appreciate. Using data from the Yad2 website, we analyzed the average price of a single-family home in major cities.

Average prices can be influenced by older neighborhoods where older homes are sold, lowering the overall figure. Additionally, the Central Bureau of Statistics defines a single-family home as a structure of up to 2 floors, provided it is not part of high-density construction (sometimes including garden or roof apartment complexes).

The data reveals that Tel Aviv is no longer the city with the highest prices for single-family homes. This year, Ramat Gan surpassed Tel Aviv, with the average price of a single-family home exceeding the 8 million shekel threshold, while Tel Aviv remains slightly below that level.

Givatayim follows among major cities with an average price of 6.87 million shekels. In Rishon LeZion, prices are above 6 million shekels. In other surveyed cities, prices fall below the 5–6 million shekel range: in Rehovot, the average home costs 4.85 million shekels, while Beersheba records the lowest price at 2.49 million shekels.

The market in Ramat Gan is currently balanced. In Tel Aviv, however, prices are declining, which impacts the private home segment. Fewer single-family homes are sold in Tel Aviv, as foreign buyers tend to favor luxury apartments, particularly those near the coast.

For comparison, the average price of a 5-room apartment in Ramat Gan is 4.14 million shekels, compared to 6.91 million shekels in Tel Aviv. This significant gap highlights how the luxury apartment market heavily influences the city's overall real estate data.