which Israeli city led in new housing starts this year?

Israel’s housing market has been marked this past year by labor shortages, high interest rates, and stagnation in transactions. Yet new data show an increase in both housing starts and building permits—though completed projects declined, and construction times stretched longer.

According to figures published Thursday by the Central Bureau of Statistics, from July 2024 to June 2025, building permits were issued for about 80,390 apartments, an 8.9% rise compared with the previous 12 months. Nearly a quarter of permits (24%) were in the Central District, 21% in the Tel Aviv District, and 17.9% in the South.

A construction site in Jerusalem

(Photo: Amit Shabi)

During the same period, construction began on 76,480 housing units, a 22.3% jump year over year. After accounting for demolitions—mainly through urban renewal projects—the net figure stood at 70,640 units.

Roughly a quarter of all starts (23.3%) were in the Central District, while Tel Aviv and the South accounted for 19.4% and 18.7%, respectively.

Of the new apartments started, 70.9% were intended for sale, including 8,360 subsidized units under government discount programs. The largest number of subsidized homes was in the Central District (2,670 units) and the South (2,265).

The remaining 29.1% were not intended for sale: 52.7% were self-builds, 19.3% combination deals, and 16.7% rental units. Nearly 95% of starts were in brand-new buildings, with only 5.1% added as extensions to existing ones.

Urban renewal remained a key driver, with construction of 17,630 units beginning after demolishing old buildings—about half in the Tel Aviv District (49.1%) and a quarter in the Central District (24.9%). Most (83.6%) were built under the TAMA 38/2 demolition-and-rebuild track or through evacuation-and-reconstruction plans.

Another 3,900 units were added as extensions to existing buildings, nearly half under TAMA 38.

When broken down by city, Jerusalem topped the list with 6,600 new apartments started, followed by Tel Aviv–Jaffa (5,870), Ofakim (2,990), Ashdod (2,900), Be’er Ya’akov (2,840), Ramat Gan (2,770), Petah Tikva (2,700), and Lod (2,100).

Cities showing continued growth after previous increases included Tel Aviv, Ofakim, Ashdod, Petah Tikva, and Kiryat Bialik. Others—including Be’er Ya’akov, Ramat Gan, Beit Shemesh, Bat Yam, Kiryat Gat, Be’er Sheva, and Rishon Lezion—saw renewed growth after earlier declines.

Despite the rise in starts, completions fell. From July 2024 to June 2025, about 54,760 apartments were finished, a 4.9% drop compared to the prior year. The Central District had the highest share of completions (23.3%), while Haifa had just 8.4%.

Construction times also lengthened. The average duration per building was 31.4 months, and the weighted average by units per building was 36.3 months—both longer than the 27.6 and 33 months recorded the previous year.

At the end of June 2025, there were 196,670 apartments under active construction, with nearly half located in the Tel Aviv and Central districts (24.9% and 23.7%, respectively), compared with just 8.7% in the Haifa District.