Real Estate Investors Are Selling Apartments: Is the Market Heading for a Shift?
In June 2026, investors purchased 1,392 apartments—a 64% jump year-on-year, though this is skewed by the low baseline during the war with Iran. Meanwhile, the investor share of the market remains stable, and net balances remain negative.
Real estate investors have faced a difficult period since the end of 2021, as the tax on second apartments rose from 5% to 8%. Unless there is a significant policy shift, this temporary order is expected to be extended, keeping the tax burden high through 2027. While there was talk months ago of adjusting the tax to 6%, no decision has been reached. Consequently, many investors remain on the sidelines, as high taxes combined with market stagnation render many investments uneconomical.
Data for June 2026 from the Ministry of Finance's Chief Economist Division presents a complex picture. While there was a surge in investor purchases compared to last June, a deeper analysis reveals that, in net terms, investors continue to reduce their footprint in the Israeli residential market.
During June 2026, investors purchased 1,392 apartments—a sharp 64.3% jump compared to June 2025. This creates the impression of a massive return to the market. However, this dramatic increase is primarily due to the extremely low baseline recorded in June of last year during Operation "Am Kelavi." Compared to June 2024, the increase is a modest 5%, similar to the growth recorded in May of this year.
The share of investors in total market transactions held steady at 16%. Half of the apartments purchased by investors were new builds, while the remainder were secondary market acquisitions.
Investor activity on the sales side was aggressive: they sold 1,487 apartments, a 40.1% jump compared to June of last year and a 6% increase over May. As a direct result, net investor purchases remained negative, with their total housing stock decreasing by 94 units in June alone.
Data shows that since October 2021, on the eve of the purchase tax hike, at least 8,435 apartments have been removed from investor portfolios.
These figures highlight the mood among investors: interest rates and high taxation are eroding the feasibility of holding investment properties. Investors are leveraging price increases and recovering demand to liquidate assets and exit the market, while new acquisitions are concentrated primarily on contractor financing deals or targeted purchases.
Another indicator points to an increase in sales by foreign residents, which reached 60 apartments in June—the highest level since late 2022—further signaling a flight of foreign capital.
Is the real estate market gradually losing the dominance of investors who continue to release apartments for first-time homebuyers and those downsizing? It remains unclear. Their market share remains at 16%, and it appears they are reducing their presence in line with other market sectors.
