Analysis Reveals 20% of Cancelled Home Buyers in Southern Israel Earn High Incomes
An analysis of cancelled home purchases in southern Israel from 2023 to 2025 shows that 20% of buyers cancelling for economic reasons earn around 60,000 shekels monthly. The Ministry of Finance links rising cancellations to developer financing promotions, though direct evidence is pending. The Bank of Israel recently imposed restrictions on such promotions to mitigate risks.
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- 20% of buyers cancelling homes for economic reasons earn about 60,000 shekels monthly.
- Cancellations in southern Israel rose 41% from January to August 2025.
- Average cancelled apartment price was around 1.7 million shekels.
- 40% of cancellations come from households earning under 12,000 shekels monthly.
- Developer financing promotions are suspected but not yet proven as a cause.
- Bank of Israel imposed financing restrictions in March 2025 to reduce risks.
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.
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