Southern Israel Housing Market Sees Sharp Decline in Sales

After two years of leading the nation in housing demand, the southern Israeli cities of Netivot and Ofakim have experienced a dramatic downturn in sales over recent months, with double-digit percentage drops. While construction continues and buildings are nearing completion, potential buyers are hesitant, and cancellations are mounting at a concerning rate.

The primary reason for cancellations stems from buyers who initially secured deals with favorable, low-risk terms but now find themselves unable to meet payments or deem the transaction no longer profitable. This has led to a significant increase in cancellations.

Overall, new apartment sales in the southern region plummeted by 25% in the first half of 2026. Netivot saw a 30% decrease in sales, Ofakim experienced a 52% drop, and Beersheba recorded a staggering 74% decline in sales volume over the past two years. In stark contrast to the slowdown in new home purchases, the rental market in these southern cities remains robust and continues to thrive.

Industry experts attribute the current stagnation partly to political uncertainty ahead of elections, a period when buyers typically adopt a wait-and-see approach. The real estate market is expected to recover towards the end of the year or early next year, contingent on continued interest rate decreases, economic stability, and consistent governance. If interest rates remain stable, prices are likely to hold steady, with experts suggesting that opportunities may arise in areas previously perceived as riskier.