Housing Starts and Price Trends: Which Israeli Cities Lead Construction?

Housing prices are never static; they fluctuate between cities, neighborhoods, and even adjoining houses on the same street. The primary driver of these price movements is the fundamental economic balance of supply and demand, which is heavily influenced by new construction starts.

Construction Starts and Price Dynamics

Where demand outpaces supply, prices rise; conversely, an oversupply with low demand drives prices down. Equilibrium is found where supply and demand are balanced. Using Central Bureau of Statistics data, we examined the leading cities in housing starts, though high construction does not automatically guarantee price drops. For instance, building a 2,000-unit neighborhood in Ofakim, where supply is already high, typically pushes prices down as sellers face a limited pool of buyers. On the other hand, constructing a boutique building in a high-demand neighborhood in Givatayim or Jerusalem can trigger price increases.

"Where demand is high and there are no homes for sale, prices will rise. And vice versa — where supply is high and demand is low, prices will fall."

Top Cities in Construction Growth

Data covering July 2025 to June 2026 compared to the previous year highlights the top five cities leading in construction growth: Kfar Saba, Yehud-Monoson, Ashkelon, Kiryat Gat, and Herzliya. While Ofakim is known for massive housing supply, it experienced its peak construction wave in the preceding year and now appears among cities with declining new starts.

• Kiryat Gat and Ashkelon: Kiryat Gat expands via the Carmei Gat neighborhood and affordable housing programs, while Ashkelon surged post-war due to high demand for apartments with reinforced security rooms (mamad).

• Kfar Saba and Herzliya: Kfar Saba benefits from the development of the Young Neighborhood and Green Kfar Saba. Herzliya sees accelerated growth driven by the Glil Yam project.

• Major Metropolises: Cities like Tel Aviv constructed 7,611 apartments—nearly a 20% surge—outpacing mid-sized cities by a wide margin, alongside robust building figures in Jerusalem, Haifa, Petah Tikva, and Ramat Gan.