Are Israel's Unsold Apartment Statistics Merely an Urban Legend?

Are the figures regarding unsold apartments in Israel based on misleading and flawed data? At the end of July 2026, a slight decline was recorded in the number of unsold apartments, following a record peak in March of over 86,000. An in-depth analysis by the 'Bonim Atid' firm, economist Idan Peleg, and real estate appraiser Roi Fishman examines this phenomenon, which has generated considerable headlines in recent months.

The volume of unsold apartments impacts the market because many view it as a barometer of sentiment within the real estate sector. Recently, the chair of the Appraisers Association, Nehama Bogin, stated that the figure pointing to 85,000 unsold apartments is essentially an 'urban legend.' She explained that the true metric is the number of completed unsold apartments, rather than units that merely received a building permit and are not expected to be sold years before project completion.

The Central Bureau of Statistics Definition and Construction Timelines

According to the Central Bureau of Statistics (CBS) definition, an unsold apartment in inventory is a new unit for which a full building permit has been issued for sale purposes, but the sale has not yet been reported to the Tax Authority. In other words, the quantity of unsold apartments increases following the receipt of a full building permit. In the vast majority of Israeli projects, not all apartments are sold before construction begins, driven by various entrepreneurial considerations such as preserving price-raising potential during construction and maximizing revenue over the project's development lifecycle.

Peleg and Fishman found that, according to CBS data, the average construction duration has extended to 32.3 months, compared to 27.6 months before the war. 'Here lies the key to understanding the high figure,' Peleg and Fishman explain. 'An "unsold" apartment in CBS data is largely a unit still under construction and sometimes even prior to commencement. When high housing starts combine with an extended average project timeline, the recorded inventory grows.'

Regarding the inventory of unsold apartments that are built and ready for immediate occupancy, they explain that 'according to the latest publication on the topic from April 2026, this figure stood at about 11.2%—meaning 9,400 apartments. By comparison, in November 2024 it was about 17% (roughly 12,000 apartments).' They emphasize that attention should focus on the absolute volume of apartments rather than percentages.

Exclusion of Older Inventory and Developer Flexibility

Furthermore, they note that the CBS decided to exclude from the count all apartments that remained unsold within 15 months of receiving Form 4 (certificate of completion) for the building. The last time this figure was officially published was in May 2025—about 15,170 apartments. Their review indicates that in May 2026, due to this exclusion, about 300 apartments were removed (approximately 0.4% of total apartment inventory), and in recent months less than 1% has been deducted monthly, gradually reducing the total inventory.

Addressing whether developers face pricing constraints on immediate-occupancy apartments, they noted: 'We examined the issue with professionals across several financing banks and project funding funds. In practice, in most cases, after a 15-month period following Form 4, there is no longer a financing bank in the picture. This usually occurs even earlier, except in extreme cases where the developer lacks sufficient resources to settle debts with the financing bank and Tax Authority.' Consequently, the developer is legally permitted to sell apartments at preferred terms and prices without requiring external approvals or adherence to appraiser baseline reports (zero reports). Therefore, if a developer chooses not to sell them, there is no valid reason to classify these units within the unsold apartment inventory.

'When a developer experiences a genuine need and monthly cash-flow pain, they will sell, regardless of whether it is done through price reductions, various incentives, or required adjustments,' the researchers add. 'Recently, we have also seen developers deciding to place unsold apartments on the rental market to minimize losses from municipal property taxes, management fees, and financing costs.'

Apartments Awaiting Construction and the Ultimate Conclusion

As for apartments that received building permits but whose construction has not yet commenced, they enter the inventory if unsold. 'This is a figure worth dwelling on for a moment: we are talking about thousands of apartments. It is interesting to look at 2024, for example: construction had not yet started on about 2,160 apartments out of all units granted building permits in the third quarter of 2024 (20,580 apartments). One would expect construction to begin no later than a year and a half to two years after permit issuance; otherwise, why secure a building permit in the first place?'

What is their final conclusion? 'The correct and true method for assessing supply versus demand for housing is comparing household growth data against building completion figures. When combining housing starts data, one can understand what lies ahead in the coming years.' Simply put, the 'unsold apartment celebration' may indeed be an optical illusion, as Bogin argued. The true test, as noted, remains the pace of housing completions relative to population growth.