Analysis Reveals 20% of Cancelled Home Buyers in Southern Israel Earn High Incomes

A recent analysis of nearly 500 cancelled real estate transactions in southern Israel between 2023 and 2025 reveals a surprising trend: while many cancellations are linked to low-income households, about 20% of buyers who cancelled for "economic reasons" actually earn an average gross monthly salary of approximately 60,000 shekels. This data was published by Galit Ben Naim, Deputy Chief Economist at the Ministry of Finance.

The phenomenon of transaction cancellations has gained attention amid a rise in cancellations after contract signing. According to the Ministry of Finance's real estate sector review for June, cancellations recorded in January 2025 totaled 1,294 for deals made between 2023 and 2025, increasing by 41% to 1,821 by August. The ministry points to developers' financing promotions as a potential factor behind this trend.

Ben Naim focused on the southern region, which has the highest number of cancellations (close to 500), examining the income profiles of those citing economic reasons for cancelling. She noted significant heterogeneity among these buyers, with some well-known individuals cancelling purchases of average-priced apartments around 1.7 million shekels. This income-to-price gap raises questions about the true reasons for cancellation, suggesting that the issue may not be payment difficulties but rather doubts about the economic viability of the purchase.

Additionally, about 40% of cancellations for economic reasons come from households earning less than 12,000 shekels monthly, highlighting a broad spectrum of financial situations among cancellers. Ben Naim suggests that developers' financing deals, which allow deferred payments or special financing terms, might be influencing cancellations, though no direct evidence currently links these promotions to cancellations due to reporting requirements only taking effect at the end of 2024.

She also welcomed the Bank of Israel's March 2025 restrictions on developer financing promotions, stating that sometimes circumstantial evidence is sufficient when risks are high. Future analysis may benefit from artificial intelligence tools applied to sales contracts to better understand these dynamics.