Too many agents and too few housing deals in Tel Aviv

This week, new ethical regulations for real estate agents went into effect, requiring more professional and higher legal standards than previously needed. In the present situation, the concern is that many agents will find it difficult to comply, with the number of agents in Israel too many for the relative size of the real estate market by tens of percent, especially in the Tel Aviv metropolitan region, primarily Tel Aviv, and they will be forced to leave the profession.

A “Globes” investigation found that in the past two years, many real estate agents have been abandoning the profession. This trend is expected to continue in the near future. Israel Realtors Association chairman Itzik Levy adds that the number of people taking the broker licensing exam also declined last year.

According to data from the Registrar of Realtors at the Ministry of Justice, at the end of 2024 there were 24,885 licensed real estate agents in Israel, double the number 15 years ago. The main reason for the increase has been the price increases recorded over these years, and a significant rise in the number of deals, which attracted more people to the profession, and try to obtain a license to enjoy the boom.

Housing prices jumped

At the end of last decade, especially 2018-2019, the pace of price rises in the housing market slowed, and even fell slightly in 2018, and the number of deals declined but between 2020 and 2022, the pace of price rises renewed its acceleration and housing prices jumped by 30%, with more people becoming real estate agents. Between 2020 and 2022, the number of realtors rose 26%, peaking at 26,193 in 2022. Then the Bank of Israel began hiking interest rates, which greatly reduced the number of real estate deals. The interest rate increase effect was felt mainly in 2023, when housing prices fell 2% and the number of deals fell to about 70,000, a similar number seen in the early 2000s, during the second intifada.

At this point in time, realtors began to leave the profession. In 2023, about 150 agents did not renew their licenses; while last year the number of those abandoning the profession climbed to 1,200, and the decline is likely to continue.

Too many realtors in the market

“Globes” analysis found that the industry is currently saturated with agents, not suitable for the current shrinking market conditions, and pressures for renewed price falls.

In 2024, about 100,000 deals were completed, with just over half of them for second-hand apartments. In other words, the ratio between the number of agents in Israel and the number of second-hand deals in 2024 was almost one to two.

Such a ratio was suitable when half of second-hand deals were conducted by agents but this is not today’s reality in Israel. There is no precise data on the number of deals in which agents are involved, but estimates are that it is between 25% and 33% of second-hand deals.

These numbers indicate a surplus of realtors in recent years and a situation in which many cannot rely on earning a livelihood. Basing this theoretical ratio between agents and deals and estimates of the deals that agents in Israel conduct, then there are currently about 10,000 agents registered in excess of market needs.

Levy says, “A great many agents are in a difficult economic situation today, some are leaving the field and offices are closing. In the most recent exams of the Registrar of Realtors, there was a decline of almost 25% in the number of taking the exam who applied for brokerage, and from 2,300-2,400 taking the exam in recent years, the number has dropped to about 1,700.”

Tel Aviv metropolitan area leads

A more detailed examination of the major cities reveals finds that the number of agents varies significantly from place to place. The city where the number of agents most significantly exceeds the market situation is Tel Aviv, which has the largest number of real estate agents – 2,566. Last year, only 2,270 second-hand deals were completed there, which indicates that the city has more agents than deals. Nearby cities also have too many agents operating, relative to the number of second-hand deals: in Rishon LeZion, Ramat Gan, and Holon, the number of agents is 70% of the deals, and there is a similar ratio in Netanya.

Assuming that a healthy ratio between agents and deals should be 33%, the current market situation requires half the number of agents operating in these cities and about 25% of the number of agents currently operating in Tel Aviv. A relatively high ratio is also found in Jerusalem – 56%.

In Beersheva, Haifa and Ashkelon, on the other hand, “Globes” found that the ratio of agents to deals is lower at 20%-25%, and is in line with the market. It could that further from the center of the country, buyers and sellers rely less on brokers, or that the large increase in the number of agents mainly affected high demand areas, and less the periphery.

“The realtor profession has suffered three very severe blows in the last two years,” explains Levy. He lists the increase in the interest rate environment and the outbreak of the war, following which the number of deals fell. However, according to him, the strongest blow came from another direction. “At the beginning of 2024, contractors found the solution of the 10-90 financial deals, causing many buyers to purchase apartments within this framework.” These were new apartments in which buyers put down 10% in equity and paid the balance when the apartment is built and ready for occupancy. Due to these deals, many buyers chose to purchase a new apartment instead of a second-hand apartment. This not only slowed the pace of second-hand apartment sales, but also reduced demand for these apartments.

Thus, many who were seduced by the booming market of 2021, learned the profession and received a license in 2022, found in 2023 and 2024 that they had no income, and according to the current situation, it seems that in 2025 the number of agents quitting the profession will only increase.

Published by Globes, Israel business news – en.globes.co.il – on March 11, 2025.

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