Ministry of Finance warns: Another wave of real estate transaction cancellations is on the way
Most buyers who purchased an apartment during the financing benefit period have not yet reached the moment of truth, where they are required to pay the balance. According to the Ministry of Finance, this is expected to impact the market significantly in the coming year.
A few months ago, the Ministry of Finance published a review regarding the cancellation of real estate transactions. According to the report, approximately 1,300 transactions were cancelled over a three-year period, averaging 36 apartments per month.
The Ministry noted that since 2021, about 2,000 transactions have been cancelled in total: 700 between 2021 and 2022, and 1,300 between 2023 and 2025. When comparing these figures to the peak years, when interest rates were low and there was no apparent reason for cancellations, it becomes clear that these numbers are not exaggerated.
In an upcoming review, the Ministry of Finance will revisit the wave of cancellations. According to Galit Ben Naim, Deputy Chief Economist at the Ministry, transaction cancellations are no longer a marginal phenomenon. A prominent example circulating on social media involves a buyer who purchased a luxury apartment "on paper" two and a half years ago but failed to sell their existing property. While such cases remain isolated, the Ministry warns they could evolve into a broader trend.
In this scenario, when a buyer cannot sell their apartment, they face two options: complete the transaction for a property whose market value has dropped by 1 million NIS compared to the contract price, or cancel the deal and absorb draconian cancellation fees of 10% of the apartment's price.
The willingness of buyers to absorb losses of hundreds of thousands of shekels just to exit a contract indicates a shifting trend. The Tax Authority and the Chief Economist's division are closely monitoring the data ahead of an updated report, which will present official figures on the scale of the phenomenon. Nevertheless, it is important to note that such transactions remain rare and do not characterize the housing market as a whole.
To understand when the real wave of cancellations will arrive—or when the danger will pass—one must look at the most critical figure: the delivery date. An analysis of new apartment purchases on the free market signed between December 2024 and December 2025 in high-demand areas (Center, Tel Aviv, Sharon, and the South), where contractor financing benefits were prevalent, reveals an interesting picture:
Only a quarter of the apartments sold with financing benefits have been delivered (Ministry of Finance).
According to the data, only a quarter of the apartments purchased during the peak of financing benefits (such as 10/90 schemes) were supposed to be delivered by now, even without accounting for standard construction delays. By the end of 2027, only half of these apartments will reach their delivery date.
The implication is clear: most buyers who purchased during the promotional period have not yet reached the "moment of truth," where they are required to pay the balance (the remaining 80%-90%) or complete the sale of their old apartment.
The Ministry of Finance asserts that the stress test for the real estate market is far from over. Based on the project timelines, the current wave of cancellations is merely a prelude, and it will likely intensify in the coming years as construction projects reach completion. The major question remains: will the volume of new transactions rise in the coming years and once again push the wave of cancellations to the margins?
