Urban Renewal and the Construction of 81,020 New Units

21/012/2025

Urban renewal remains one of the main drivers of construction in Israel: data from the Central Bureau of Statistics show that last year, between October 2024 and September 2025, construction began on approximately 17,570 apartments as a result of demolishing existing buildings and constructing new ones, of which more than 80% were built as part of TAMA 38/2 and evacuation-and-construction projects.

This figure illustrates the central role of urban renewal in the current construction wave, alongside the sharp rise in construction starts in general.

According to the Central Bureau of Statistics, in the past 12 months construction began on approximately 81,020 apartments nationwide, an increase of 31.5% over the previous 12 months. Of the total apartments, 93.2% are additions to the housing stock, after deducting those demolished as part of urban renewal, which yields a net total of approximately 75,540 housing units started. During this period, approximately 5,480 old apartments were demolished, most of them as part of urban renewal projects.

The geographic breakdown of apartments built as part of demolition and reconstruction indicates a significant concentration in high-demand areas: more than half (53.3%) were built in the Tel Aviv District and approximately another quarter (24.1%) in the Central District. These figures underscore the continued leadership of the Dan Bloc (Gush Dan) and the center of the country in evacuation and reconstruction, both in terms of scope of execution and concentration of projects.

In addition to demolition and reconstruction, approximately 4,330 apartments were built as extensions to existing buildings. Here too, urban renewal carries significant weight, with 45.2% of the apartments added to existing buildings built under TAMA 38. A particularly high rate of extensions was recorded in the Northern District (21.4%) and the Central District (20.2%).

The CBS data also indicate an increase in construction starts in cities where urban renewal plays a key role. Tel Aviv-Yafo led construction, with approximately 7,450 apartments started, an increase of 46.4% compared with the previous year. In Jerusalem, construction began on approximately 7,050 apartments, an increase of 11.8%. Petah Tikva recorded a jump of 66.7% with approximately 3,135 apartments, and Ramat Gan rose 52.9% with approximately 2,698 apartments; these are all cities where evacuation-and-construction and TAMA projects make up a significant part of the construction volume.

Bat Yam, a city associated with extensive urban renewal, also showed a particularly sharp increase of 120.7%, with approximately 2,256 apartments under construction. Beer Yaakov stood out with an exceptional increase of 438.6%, with approximately 2,402 apartments, and Holon recorded an increase of 261.4%. On the other hand, cities where construction starts declined, such as Lod, Netanya and Haifa, indicate high volatility in the pace of execution between different localities.

Alongside the rise in construction starts, construction was completed on approximately 57,740 apartments between July 2024 and June 2025, a more moderate increase of 4.3% compared with the previous period. The average construction time of a building was 31.8 months, while the construction time weighted by the number of apartments in the building reached 37 months, a figure that reflects the complexity of the projects, in particular large-scale urban renewal projects.

At the end of September 2025, the number of apartments under active construction stood at approximately 203,310, of which approximately half were concentrated in the Tel Aviv and Central districts. This volume reflects a significant inventory of projects at various stages of execution, a significant part of which is based on demolition and reconstruction in the heart of older urban areas.

In summary, the CBS presents a clear picture: urban renewal is a central component of new housing supply in Israel. The high concentration of projects in the Tel Aviv and Central districts, together with the sharp rise in construction starts in the major cities, points to the continued deepening of the evacuation-and-construction and TAMA model as a central solution to housing needs, while addressing the shortage of available land and the aging of the built stock.

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