The number of canceled home purchases has spiked in recent months, rising 41 percent since the beginning of the year, according to the Finance Ministry’s most recent review of the housing sector.

The increase points to growing strains on the housing market as developers have aggressively promoted new developments with generous financing options.

In a number of cases, buyers were not required to put any money down when buying “on paper,” and fees for cancellations were waived or heavily discounted, senior deputy to the chief economist Galit Ben Naim commented on social media after the report’s release.

Israel’s housing market has slowed in recent years, with prices falling nearly 2% in the past year, partly in reaction to the multifront war Israel has been engaged in since Hamas invaded southern Israel on October 7, 2023. High interest rates, a record supply of unsold new housing, and high prices have also helped to tamp down sales.

In response, developers have taken to offering more attractive — and riskier — financing options to buyers, who have become more averse to buying homes due to the uncertainty of the situation. The trend became so pronounced in recent years that in March, the central bank stepped in and imposed restrictions on those packages, fearful of the increased risk to individuals and the entire banking system.

According to the Finance Ministry report, of the purchase deals signed between 2023-2025, a total of 1,821 had been canceled as of August 2026, with some 500 of those in the past seven months alone.

While contract terminations naturally increase as time elapses, the recent acceleration points to deeper structural factors, economists at the Finance Ministry noted.

Contracts signed during 2024 saw a........

© The Times of Israel