Home prices climbed another 0.9% during January–February 2025. The steepest monthly increases were recorded in the North (1.8%) and Tel Aviv (1.5%) districts. Contractors warn that without government intervention, the impact on housing supply could worsen this year—and potentially even more so in the next. Meanwhile, the Consumer Price Index rose by 0.5% in March and 3.3% over the past year.

By Nimrod Buso, Nadlan Center

According to data released Tuesday evening by the Central Bureau of Statistics (CBS), home prices increased by 0.9% when comparing transactions from January–February 2025 with those from December 2024–January 2025.

A regional breakdown shows the following price changes: Jerusalem (1.4%), North (1.8%), Haifa (0.9%), Center (-0.3%), Tel Aviv (1.5%), and South (1.1%). New home prices rose exactly 1%.

On an annual basis, comparing January–February 2025 with the same months in 2024, the overall housing price index rose by 7.5%, while new home prices increased by 6.4%.

Regional annual increases were observed across the board: North (11.7%), Tel Aviv (9.7%), Haifa (8.8%), Jerusalem (6.8%), South (5.1%), and Center (3.8%).

Consumer Price Index Still Rising

The CBS also reported that the Consumer Price Index (CPI) rose by 0.5% in March 2025 compared to February 2025. Over the past 12 months (March 2025 vs. March 2024), the CPI increased by 3.3%.

The monthly rent for tenants renewing their leases rose by 2.8%, while the rent for new tenants (where there was a change in tenants) increased by 3.7%.

The Residential Construction Cost Index rose by 0.4% in March 2025, reaching 138.2 points compared to 137.7 the previous month. Since the start of the year, the index has increased by 3.4%. Excluding labor costs, the index remained unchanged.

Over the past year (March 2025 vs. March 2024), the Construction Cost Index increased by 6.1%, due to a 10% rise in labor costs and a 3.5% increase in material and product prices. In March 2025, material and product prices remained unchanged, while labor costs rose by 0.8%.

Tomer Zlaih, Vice President of the Israel Builders Association, responded to the Home Price Index: “The disruptions in the construction industry have yet to be fully reflected in the market. Without government intervention, the impact on housing supply may worsen already this year and even more so next year. Contractors are struggling to complete builds and launch new projects.

We reiterate our call for the government to address the crisis by reducing construction costs. This includes immediately, after the holiday, allowing direct import of skilled workers through certified manpower agencies, cutting state land prices, selling significantly more construction-ready land—especially in high-demand areas—and implementing a uniform betterment tax to replace current levies.”