Israeli Housing Affordability Declines in Second Quarter of 2026

The improvement in the financial situation of homebuyers in Israel came to a halt in the second quarter of 2026. Following several quarters of decline in monthly mortgage repayments and required equity, both indicators worsened in the second quarter. The average monthly repayment rose by approximately 9 NIS, while the required equity increased by about 30,000 NIS.

The Alrov Institute for Real Estate Research at the Coller School of Management, Tel Aviv University, which publishes its quarterly index in cooperation with Calcalist, examines the status of homebuyers using two main parameters: the monthly mortgage repayment and the equity required to purchase a home. The index tracks a typical 4-room apartment in 12 cities, assuming a 70% financing level and a 25-year mortgage term.

Rising Repayments and Regional Disparities

In the second quarter of 2026, the average monthly mortgage repayment stood at 10,864 NIS, compared to 10,855 NIS in the first quarter. This represents a minor quarterly increase of 0.08%, though compared to the same quarter last year, it still reflects a significant decrease of 4.8% (about 552 NIS per month). The year-on-year improvement was evident across all 12 surveyed cities.

However, the quarterly breakdown presents a different picture. Only five cities recorded a decrease in monthly repayments: Ramat Gan, Rehovot, Haifa, Hadera, and Tel Aviv. The sharpest decline was registered in Ramat Gan (4.4%) and Rehovot (2.6%). Conversely, repayments rose by 4.1% in Rishon LeZion, 2.7% in Ashdod, and 2.4% in Bat Yam.

The Barrier for Middle-Class Buyers

Despite the annual improvement, the situation for first-time homebuyers remains severe. Approximately 70% of Israeli households in the seventh decile of income and below cannot afford a typical 4-room apartment if the monthly repayment is capped at the recommended 30% of net household income. This holds true for 10 out of the 12 surveyed cities, with Beer Sheva and Haifa being the only exceptions.

For households in the sixth decile, the average repayment reaches approximately 44% of net income, in the seventh decile it is 39%, and in the eighth decile it is 35%—all well above the 30% affordability threshold.

In monetary terms, the gaps between cities remain vast:

• Tel Aviv: average monthly repayment of 16,850 NIS;

• Jerusalem: 12,185 NIS;

• Ramat Gan: 11,638 NIS;

• Haifa: 6,519 NIS;

• Beer Sheva: 5,106 NIS.

Equity Requirements Surge

The average equity required in the second quarter stood at approximately 1.38 million NIS, up by 30,000 NIS within a single quarter. Compared to the same period last year, this is still a decrease of 9.5% (about 144,000 NIS).

For households in the seventh decile, the required equity exceeds 740,000 NIS in 9 out of the 12 cities. In Tel Aviv, it reaches 2.76 million NIS, in Jerusalem 1.59 million NIS, and in Ramat Gan 1.45 million NIS. In contrast, the required equity in Haifa is 162,000 NIS, in Ashdod 670,000 NIS, and in Hadera 742,000 NIS.

Interestingly, transaction volumes for 4-room apartments in these 12 cities remained virtually unchanged, with 6,461 transactions in the second quarter, compared to 6,458 in the first quarter and 6,457 in the second quarter of 2025.

The study was conducted by Professor Danny Ben-Shahar, Director of the Alrov Institute for Real Estate Research, and Dr. Dana Neier, a research fellow at the institute. Professor Danny Ben-Shahar stated:

"For a prolonged period, the index has been stagnating. The bad news is that historically, we are at the upper range of mortgage repayments and required equity to buy a home while keeping repayments reasonable relative to income. In major cities, the vast majority of households entering the market need more than 700,000 NIS in equity, otherwise they are forced to move far from the center toward Haifa or Beer Sheva."