The Dangerous Bubble in Real Estate: 41% Surge in Apartment Purchase Cancellations

The Chief Economist Division at the Ministry of Finance published data showing a 41% surge in apartment purchase cancellations within six months, from 1,294 in January 2026 to 1,821 in August 2026. Most deals were signed based on contractor financing schemes, which the Bank of Israel restricted. Be'er Sheva leads in cancellations with 475 canceled deals, and 7% of deals signed in 2023 were canceled. The concern is a snowball effect in the housing market and contractor collapse.

The Chief Economist Division at the Ministry of Finance published new data today (Wednesday) showing a 41% surge in apartment purchase cancellations within six months. From January 2026, when 1,294 deals were canceled, to August 2026, when 1,821 deals were canceled. All deals were closed between 2023 and 2025, with the majority closed in 2024. Their common denominator: they were signed based on contractor financing schemes, such as 20-80 or 90/10, which the Bank of Israel restricted due to their high risk to the market. The cancellations raise concerns of a snowball effect in the housing market, with buyers failing to meet obligations. For buyers, this means fines of hundreds of thousands of shekels, and for contractors, it could lead to an economic spiral causing project failures and even collapse. Be'er Sheva leads in cancellations with 475 deals, constituting 3.4% of all deals, similar to Tiberias. Of deals signed in 2023 alone, 7% were canceled in Be'er Sheva. Most cancellations in the south belong to several private real estate companies. High cancellation rates were also recorded in Tel Aviv (2.7%) and Jerusalem (2.8%) for 2024 deals. In 60% of canceled deals, the apartment delivery date is far off, two years or more. The Treasury's June review signals a certain recovery, with a 50% increase in deals compared to last June, and a 6% increase compared to the previous month. In contractor sales, there is an 84% increase compared to last June, but a 1% decrease compared to May 2026.