Tel Aviv Surpasses Jerusalem in Housing Construction Starts

Tel Aviv has surpassed Jerusalem in housing construction starts, taking the top spot with 7,611 new housing units initiated between July 2025 and June 2026. Jerusalem follows in second place with 5,440 units, while Haifa claimed third place with 3,085 housing starts, driven by a surge in urban renewal projects and new developments in the southern part of the city.

Construction Bottlenecks and Completion Declines

Despite high volumes of building permits and new construction starts—reaching roughly 37,000 permits and 38,000 housing starts in the first half of the year—the construction sector faces a severe bottleneck at later stages. According to the Central Bureau of Statistics trend data, the completion of construction dropped by 9.7% in the second quarter compared to the first quarter, reflecting a slowdown in finalized apartments.

The construction sector has seemingly reached a saturation point regarding contractors' ability to complete projects, leading to delayed apartment deliveries.

Record Active Construction and Labor Shortages

At the end of June, the number of active construction sites reached a record high of 217,200 apartments, marking an 8% increase compared to June of last year. While the government continues to accelerate planning procedures and shorten permit issuance times, industry experts point out that the core issue lies in severe labor shortages and outdated construction technologies rather than planning bureaucracy.