Israel Real Estate Prices Projected to Rise Again in 18 Months, Experts Say
Knesset elections on October 27, 2026, and declining interest rates will shape Israel's real estate market, with experts predicting renewed price growth in a year and a half.
The upcoming Knesset elections scheduled for October 27, 2026, could significantly impact Israel's real estate market, according to industry experts speaking at the Magdilim conference. While past political shifts did not necessarily lower housing costs—noting the price surge during the tenure of Naftali Bennett and Yair Lapid—Meitav investment house chairman Avner Stepak believes these elections carry unprecedented weight.
Factors Influencing the Housing Market
Stepak noted that while elections usually have a marginal impact, the current political landscape holds authentic weight for the market. Among the primary drivers, he pointed to the volume of Aliyah (immigration to Israel). "We have exhausted immigration from Russia. The next pool is the US and Canada, and the big question is what will happen there. I am quite pessimistic about massive immigration to Israel," Stepak stated.
He expressed optimism regarding urban renewal despite current market challenges and emphasized the role of interest rates in fueling mortgage growth and housing prices. Beyond financing costs, Stepak pointed to housing accessibility and general affordability as critical bottlenecks in the Israeli market.
Mortgage Trends and Price Projections
Avivi Badlov, head of the mortgage division at Mizrahi Tefahot Bank, projected that apartment prices are likely to resume their upward trajectory within about a year and a half.
"In the short term, we do not expect a significant change in apartment prices, but in my estimation, in about a year and a half we will see prices rising again," Badlov said.
According to Badlov, a combination of declining interest rates, a stabilizing security situation, and a slowdown in housing starts—particularly in central Israel—will trigger a market shift. Furthermore, rising antisemitism abroad has driven increased real estate acquisitions by foreign Jews, who frequently purchase properties together to maintain community cohesion. Badlov also urged policymakers to incentivize peripheral development through infrastructure investments, tax benefits, and enhanced financing terms.
