Financial Promotions Lead to Surge in Apartment Purchase Cancellations Across Israel

Financial schemes like the 20-80 and 10-90 promotions, which encouraged many Israelis to buy apartments two years ago, are now proving financially burdensome for numerous buyers. According to the Chief Economist at the Ministry of Finance, over 4% of new apartment transactions in 2023 were canceled by buyers unable to meet the payment terms. In the first half of 2026, approximately 37,000 apartment deals were completed, marking a slight improvement over 2025's 35,000 transactions but still reflecting a weak market.

These financial promotions, initially popular and seemingly advantageous, have led to a painful adjustment for buyers who expected significant benefits but now face difficulties repaying developers as project completions approach. Many are canceling purchase contracts and paying cancellation fees that can reach several hundred thousand shekels. The Negev region, including cities like Beersheba, Ofakim, Sderot, Netivot, and Kiryat Gat, leads in cancellation rates, with 475 deals canceled. Other areas with notable cancellations include Jerusalem (200), Tel Aviv (167), the Shfela region (225), and the central district (212).

The trend of cancellations is increasing rapidly. In January 2026, 1,294 cancellations from 2023 to 2025 were recorded, with a 41% rise by August. The Chief Economist's report highlights that cancellations are mostly from "on paper" deals where delivery dates have not yet arrived, and the final cancellation rate is expected to rise. For example, cancellations from 2021 deals stood at only 0.5% two years after the calendar year ended, while 2024 deals already show a 2.3% cancellation rate less than two years after the year ended, and 2023 deals have a 4.3% cancellation rate after about two and a half years.

The cancellations are linked to these financial promotions originally designed for investors and wealthier buyers but which ended up attracting less affluent populations who now struggle to meet payment obligations. This shift has contributed to a roughly 10% decline in transactions from the first half of 2024 to the first half of 2026, signaling a market correction away from developer financing schemes.

The report also notes widespread construction defects in most new apartments and points out that despite the housing market slump, 2026 is on track to break mortgage lending records. The evolving market conditions are prompting changes in housing policies, including those related to urban renewal projects.