Housing Ministry Seeks 20,000 More Foreign Workers to Curb Delays
Israel's Ministry of Construction and Housing has requested 20,000 additional foreign workers via the private track to curb construction delays and housing price hikes.
The Ministry of Construction and Housing has requested an additional 20,000 foreign construction workers through the private recruitment track to address labor shortages and prevent housing price hikes.
Yehuda Morgenstern, Director-General of the Ministry of Construction and Housing, addressed the request to Drorit Steinmetz, Acting Director-General of the Prime Minister's Office. According to the ministry, labor shortages continue to delay apartment completions, extend construction durations, and increase overall costs.
In addition to expanding the quota, Morgenstern called for extending a 50% reduction in permit fees for bringing in construction and renovation workers by at least six months, while also overhauling the recruitment model to allow private sector involvement.
Before the Iron Swords War, the construction sector suffered from a shortage of approximately 15,000 workers. With the outbreak of the war, the deficit surged to about 95,000 workers. Currently, approximately 90,000 foreign workers are employed in Israel's construction sector, compared to just 25,000 on October 6, 2023.
Despite the increase in foreign workers, the ministry stresses that the shortage remains acute. Difficulties include exhausting recruitment potential in Moldova, recruitment hurdles in Sri Lanka, uncertainties surrounding agreements with China and India, and a lack of additional bilateral agreements.
Data from the ministry indicates that housing starts grew by 41% over the past decade, rising from approximately 57,000 in 2016 to about 80,000 in 2025-2026. However, housing completions totaled only about 60,000 during this period.
Concurrently, construction duration extended from roughly 28 months in 2016 to approximately 37-38 months in 2025-2026, marking an increase of more than a third. The ministry attributes these delays to manpower shortages and warns that labor costs are driving up apartment prices.
«The ongoing labor shortage, stemming from the gap between demand and existing workforce volume, inevitably drives up the hourly wage of every worker already in Israel, as well as the overhead costs that staffing agencies can demand for their employment,» Morgenstern wrote in his letter.
To mitigate the crisis, the ministry estimates an immediate need for an additional 20,000 to 25,000 wet-trade workers—such as concreters and plasterers—to accelerate apartment delivery rates. Furthermore, the ministry advocates for a hybrid recruitment model enabling the private sector to participate in sourcing and screening candidates while the state focuses on regulatory oversight.
