Contractors Offer Record Financing Deals Amidst Slumping Apartment Sales
Translated & summarized from N12 by baba
Apartment sales in Israel fell 21% in September, prompting contractors to offer financing incentives at the highest rate in 18 months. The Ministry of Finance reported 45% of free-market apartments sold in September included such benefits, a significant increase from August. This trend emerges as the Bank of Israel reviews new regulations for financing deals. Investor purchases dropped sharply, while first-time buyer activity remained stable.
The story in 5 lines · by baba
- Apartment sales in Israel decreased by 21% in September compared to August.
- Contractors offered financing benefits on 45% of free-market apartments sold in September.
- The rate of financing benefits is the highest recorded in 18 months.
- Investor apartment purchases saw a 29% year-over-year decline in September.
- The Bank of Israel is reviewing new regulations for contractor financing deals.
Sales of new apartments in Israel dropped by approximately 21% in September compared to August, reaching some of the lowest figures since the early 2000s, according to the Central Bureau of Statistics (CBS). This downturn, partly attributed to the High Holidays, has prompted contractors to reintroduce significant financing incentives to stimulate the market. The Ministry of Finance reported that 45% of free-market apartments sold in monitored areas in September included financing benefits, the highest rate in 18 months. These incentives often involve buyers paying a small initial sum and deferring the majority of the payment until delivery, or the contractor covering interest payments.
The Ministry of Finance's data, focusing on areas like the Center, Tel Aviv, Hadera, Netanya, and Beersheba for apartments with delivery at least a year away, showed a 15 percentage point jump in financing deals from August's 30%. This resurgence in incentives comes as the Bank of Israel is considering new regulations ahead of the expiration of current measures at the end of 2026, which were initially implemented in March 2025 to curb risks associated with deferred payments.
In September, contractors sold approximately 1,750 unsubsidized new apartments, a 22% decrease from August. The total unsold inventory held by contractors slightly decreased by 0.7% to 85,080 units. The southern and central regions led in overall apartment sales during July-September, while the southern region led in new apartment sales. Notably, the city of Ofakim saw a significant increase in sales in September, with 89% of its 129 free-market apartments sold including financing benefits, compared to a 50% drop in sales in the first eight months of the year.
Investor purchases also saw a sharp decline, dropping 29% year-over-year in September, marking the steepest decrease among buyer groups. First-time homebuyer purchases remained relatively stable, decreasing by only 1% year-over-year, while those upgrading their homes saw a 17% decrease in purchases.
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