Study Reveals Costs of Upgrading Apartments Across 18 Israeli Cities
A new study analyzing property prices across 18 major Israeli cities reveals vast disparities in the costs of upgrading from three-room to five-room apartments amid a stagnating real estate market.
The Israeli real estate market continues to stagnate amid rising unsold housing inventory, prompting families to reevaluate the costs of upgrading to larger apartments. A comprehensive study conducted by the Contractors and Builders Association of Tel Aviv and the Center examined property prices across 18 major Israeli cities based on data from the Tax Authority and the Central Bureau of Statistics for the second quarter of 2026.
Regional Price Disparities for Upgrading Apartments
The analysis highlights significant differences in the budgetary gap required to move from a three-room apartment to a five-room apartment. Kfar Saba demonstrated the lowest relative price gap among the top five balanced cities, where a three-room apartment averages 2.21 million NIS compared to 3.45 million NIS for a five-room unit, representing a 56.4% increase or a 1.25 million NIS difference. Bnei Brak followed closely with a gap of 1.19 million NIS (61.2%), while Rehovot and Beit Shemesh recorded gaps of 1.25 million NIS (63%) and 1.26 million NIS (64.5%), respectively. Ashkelon stood out as the only city in the survey where upgrading from three to five rooms requires an absolute additional investment of less than one million NIS, rising from 1.33 million NIS to 2.25 million NIS.
Steepest Jumps Recorded in Beersheba and Tel Aviv
At the opposite end of the spectrum, Beersheba registered the highest relative gap at 122.9%, with three-room apartments averaging 830,000 NIS and five-room units reaching 1.85 million NIS. Haifa and Netanya also posted substantial relative increases of 103.7% and 94.4%, respectively. Meanwhile, Tel Aviv recorded the highest absolute monetary gaps in the country. Moving from a three-room apartment to a five-room unit in Tel Aviv requires an average additional investment of approximately 3 million NIS, as prices surge from 3.91 million NIS to 6.91 million NIS.
Industry experts note that current market conditions offer unique opportunities for home upgraders. Shmuel Lahav Zalmanowitz, owner and co-CEO of Magma Real Estate Marketing, emphasized that the market currently offers favorable conditions unseen in years, including large inventories, flexible developers, and declining interest rates.
