Deadline approaching: Bank of Israel considers new steps against contractor deals

The Bank of Israel is considering new measures against contractor financing deals, as the temporary order is set to expire at the end of the year. Treasury data shows that 45% of apartments sold in September included financing benefits—the highest rate since March 2025. The bank is conducting staff work to examine extending or adjusting the restrictions.

In about a month and a half, the Bank of Israel's temporary order that restricted aggressive contractor financing deals is expected to expire. Against the backdrop of new Treasury data, according to which 45% of apartments sold by contractors in September included financing benefits—the highest rate since March 2025—the Bank of Israel is conducting staff work to examine additional steps. The current order, which took effect in March 2025, includes a capital allocation of 150% for projects with over 40% transactions involving deferred payments, and limiting subsidized balloon loans to 10% of total mortgages. Developers are offering creative deals, such as ten-year deferred payments and interest-free loans, but the chief economist of Phoenix, Matan Shtri, warns of risks to buyers, developers, and the banking system. The Bank of Israel emphasizes that supervision continues to monitor developments.