Southern Israel Housing Inventory 6% Higher Than Official Data Amid Cancellations
Former Deputy Chief Economist Galit Ben Naim reveals that southern Israel's unsold housing inventory is 6% higher than official data due to unrecorded cancellations amid rising housing starts.
Former Deputy Chief Economist at the Ministry of Finance Galit Ben Naim continues to spotlight canceled real estate transactions in the housing market, turning her focus to Israel's southern district. According to Tax Authority data spanning transactions from 2022 through mid-2026, a total of 669 new apartment purchases were canceled in the south as sales softened, yet housing starts continue to rise.
Inventory Gaps in the South
Official Central Bureau of Statistics figures showed 10,788 unsold new apartments in the southern district at the end of June 2026. However, adding the 669 canceled transactions brings the actual inventory to 11,457 units—about 6% higher than official reports. Ben Naim explains that canceled purchases do not automatically return to the official unsold inventory pool.
"What seems surprising is the continued growth in housing starts in the southern district, especially given the ongoing drop in sales alongside rising cancellations," writes Ben Naim.
In early 2022, just before Bank of Israel rate hikes began, the south faced a cumulative deficit of about 1,200 apartments, meaning demand outpaced market-rate housing starts. By the end of the second quarter of 2026, the situation completely reversed, leaving an excess of roughly 11,000 started units that remain unsold.
The 'Amazon Shopping' Phenomenon
Beyond development challenges, Ben Naim highlights behavioral anomalies among buyers. She cites a case involving the "Target Price" (Mechir LeMeshtaken) affordable housing program, where a winner's eligibility was revoked after tax records revealed they had purchased—and subsequently canceled—market-rate apartments multiple times.
"He bought an apartment, but canceled the purchase. Then he bought and canceled again, as if it were an order on Amazon," Ben Naim notes, highlighting regulatory blind spots and potential impacts on banking financing for construction projects.
