Senior deputy chief economist in the Ministry of Finance Galit Ban Naim continues to put a spotlight on cancellations of deals in the housing market, this time on the southern district, where 669 purchase deals have been cancelled, sales are weak, yet the rate of building starts continues to grow.
The cancellation statistic, based on Israel Tax Authority Data, relates to deals signed in the period 2022-2025, and is correct to the end of the second quarter of 2026. According to Central Bureau of Statistics figures, at the end of June 2026 there were 10,788 unsold new homes in the southern district. If the 669 homes the purchases of which were cancelled are added to the total, the stock of unsold homes comes to 11,457, 6% more than the official figure, in which Ben Naim says cancelled deals are not counted.
"What seems surprising is the continued growth in building starts in the southern district, certainly in the light of the continuing decline in sales, together with the rise in the number of deal cancellations in the district," Ben Naim says.
For sake of comparison, Ben Naim points to the end of the first quarter of 2022, just before the Bank of Israel started raising interest rates, when the southern district had a deficit of some 1,200 homes, that is, the number of building starts on homes for sale in the open market was lower than the number of homes sold.
At the end of the second quarter of 2026, the situation was the reverse, with a surplus of some 11,000 building starts over homes sold.
Ben Naim raises the question of how many of the building starts were of homes that were sold and the deal was subsequently cancelled? Her estimate is that the figure includes a large proportion of the 669 cancellations., on the basis of the handover date that the contractor declared at the time of the sale. There then arises the further question, she says, of the significance of the cancellations for the bank finance for the projects.
Published by Globes, Israel business news - en.globes.co.il - on September 27, 2026.
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