Israel Housing Market Sees Rising Apartment Purchase Cancellations Amid Modest Sales Growth

In June 2026, Israel's housing market showed a complex picture despite an overall increase in transactions. While total home sales, including new and second-hand apartments, rose by about 50% compared to June 2025, this surge is largely attributed to the low activity during the war-affected June 2025. Compared to June 2024, the increase in transactions was only around 7%, with the free market showing no growth. Notably, cancellations of new apartment purchases from developers surged significantly, with 1,821 cancellations recorded by August 2026 for deals signed between 2023 and 2025, a 41% rise since January. Cancellations from 2024 contracts, the year when developers' financing campaigns intensified, jumped 53% in relative terms, reaching a 2.3% cancellation rate.

Geographically, Beersheba leads in cancellations both in absolute numbers (475 cancellations) and relative rate (3.4%), with 7% of 2023 contracts canceled there. Jerusalem and Tel Aviv also saw rising cancellation rates in 2024 deals, nearing Beersheba's levels. Developer sales in June totaled 3,593 units, including subsidized apartments, marking an 84% increase from June 2025 but still 18% below June 2024 levels when excluding subsidies. Beersheba experienced a 34% drop in new free-market sales compared to June 2024, while Tel Aviv was the only region with a 10% increase.

The report highlights that 57% of new apartments sold in June were "off-plan," with delivery expected at least two years after contract signing. Financing incentives remain prevalent, applied in 23% of developer sales with delivery dates a year or more ahead, though this is down 14 percentage points from June 2025. Cash flow from new apartment sales rose 35% year-over-year to 8.3 billion shekels, but is concentrated among a few companies.

The second-hand market remains historically weak despite a 33% increase in June 2026 transactions compared to June 2025, with notable declines in Haifa and Tel Aviv attributed partly to regional security tensions. Investor activity increased by 64% year-over-year but only 5% compared to June 2024, with investors holding 16% of transactions. Foreign buyers also increased purchases, especially Americans, with Jerusalem and Tel Aviv as primary locations.

First-time buyers purchased 5,044 apartments in June, a 60% rise from June 2025 but only an 8% increase over June 2024. Excluding government subsidies, first-time buyer purchases declined 6% compared to June 2024. Subsidized sales rose sharply, with 1,207 apartments sold under government programs in June. Homeowners upgrading their residences bought 2,321 apartments, a moderate 5% increase over June 2024. About a quarter of these were "downsizers," buying smaller apartments than they sold.