Southern Israel Real Estate Market Sees Sharp Decline in New Apartment Sales

The real estate market in southern Israel has experienced a dramatic shift, with new apartment sales dropping by 25% compared to last year, according to a report by the chief economist. Cities like Netivot and Ofakim, which previously led demand, have seen significant decreases: Ofakim down 52%, Netivot by 30%, and Be'er Sheva by 74% over the past two years. This trend indicates a sharp change in market direction, particularly affecting cities that were previously top sellers.

Eyal Bleicher-Cohen, CEO of Yessodot Group, explained to i24NEWS that the data highlights a reversal in the market, especially in cities that previously saw high contractor sales. "Netivot and Ofakim enjoyed very high demand for a period, and now we are seeing a significant decrease in sales pace," he stated.

Notably, Netivot accounted for 44% of all canceled deals in southern Israel signed between 2023 and 2024, a disproportionately high percentage given its share of overall sales. Bleicher-Cohen suggests this indicates that some demand during the market peak was less stable, likely driven by significant financing incentives and deferred payments. He added that financing promotions continued into 2025, allowing buyers to defer substantial payments until apartment delivery.

While the full extent of cancellations for these deals remains unclear, Bleicher-Cohen noted that deals reliant on the assumption of continued price increases or easier future financing are now facing significant challenges. He believes many of these cancellations are from investors who realize they made poor deals and are moving on. The report also indicates that many buyers may have realized they cannot afford mortgage repayments after initially being attracted by low down payments, often just 10% of the deal's value.