Israel's Housing Market Surges in June Amid Rising Deal Cancellations and Mixed Long-Term Trends

Israel's housing market saw a sharp rebound in June 2026, with 8,757 apartments purchased, marking a 50% increase compared to June 2025, according to the Ministry of Finance's Chief Economist Department. However, this surge is largely attributed to an exceptionally low base in the previous year. Compared to June 2024, transactions rose by only 7%, and when excluding government-subsidized deals, the free market showed no growth from 2024 but a 42% increase from 2025. Activity remains low historically, with June 2026 transactions in the free market among the lowest since the early 2000s, especially in the secondary market.

Government financing incentives continue to influence the market, with 23% of transactions in monitored regions reporting such benefits, including 36% in the central region and 32% in Netanya. Investor activity increased, with 1,392 apartments bought for investment in June, up 64% from June 2025 but only 5% above June 2024. Investors accounted for 16% of all purchases, half of which were new apartments. Foreign buyers acquired 153 apartments in June, mostly Americans (56%), followed by French and British buyers. Jerusalem led foreign purchases with 61 apartments, primarily by Americans.

A notable concern is the rise in cancellations of new apartment deals signed between 2023 and 2025. By August 2026, 1,821 cancellations were recorded, a 41% increase since January. Cancellations from 2024 contracts rose sharply to 2.3% of deals, up from 1.5% earlier in the year. Beersheba had the highest cancellation rate at 3.4%, with some 2023 contracts canceled at a 7% rate. Jerusalem and Tel Aviv also saw increased cancellations nearing 3%. The Ministry of Finance cautions that final cancellation rates are uncertain, as many apartments have not yet reached delivery dates, some extending to 2028 or later.