The company sold apartments for a billion shekels - only one deal was canceled

The Ministry of Finance has recently been warning of a wave of cancellations in the real estate sector. The big question is how to relate to it: in some cities, the wave of cancellations reached 7% during peak periods. It must be remembered that the wave of cancellations comes against the backdrop of 2023-2025 deals. We do not yet know the exact rate of deals that were canceled after being signed in 2026, because buyers will enter the apartments at a later date, and cancellations usually occur in the second installment of payments.

Suppose a person purchased an apartment in 2024 and paid a down payment of only 10%. The contractor determined that one month before the delivery date, in early 2027, the buyer would pay the money. The buyer did not have equity. He was counting on the new job, on money that was supposed to be received as an inheritance, or on a sum that his parents promised to give, but something happened along the way. He could not meet the payments.

It is likely that in such a case, he will identify the trend near the end of 2026, contact the contractor, and the two will begin negotiations. Some contractors waive the cancellation fee and roll the apartment over to another buyer. Others demand full or partial compensation. In such a situation, the buyer gets into trouble: he has to pay compensation, and the dream of buying an apartment moves further away. In the worst case, he took a loan to pay the 10% equity at signing and has not finished paying it off.

An examination of the reports of large companies reveals a rosy picture compared to what has been painted for us in recent weeks. The wave of cancellations is almost imperceptible. At Israel Canada, a giant company that sells luxury apartments, only 2 contracts were canceled in six months. At Tidhar, 5 cancellations were recorded. In some cases, these apartments have already been sold to a third party.

At Hagag Brothers, for example, a number of contracts were canceled in the previous quarter. It turns out that some of the canceled agreements are purchase requests. A purchase request is not a contract. A person asks to purchase an apartment and notifies the company that he has changed his mind - usually he leaves without financial damage, and the company reports a canceled purchase request. Hagag Brothers sold apartments for a billion shekels, but only one contract was canceled, and that apartment has already been sold. And all this is happening in the toughest market in Israel - luxury apartments.

An examination of non-public companies reveals a similar picture. At the Yossi Avrahami company, for example, they report that no deal has been canceled despite dozens of deals signed recently. Also in another public company, YBOX, it was written in the report that "in the company's assessment, such exposure is not expected to be material." The company noted that only one cancellation was recorded for the purchase of a housing unit in the company's projects that are in the marketing stages (about 3 million shekels excluding VAT).

As we reported earlier this week, 15 sales deals worth nearly 57 million shekels were canceled at Azorim. 7 of the contracts were in the Frankfurt Boulevard project, mainly due to the failure to issue a building permit. CEO Adi Dana responded here and said that these are low cancellations compared to more than 1,000 apartments sold. In these contracts, buyers were given the right to cancel the contract in case of failure to receive a building permit by the date set in the agreement - an option that the buyers chose to exercise. Acro reported 4 cancellations, and the Prashkovsky company reported two in six months.

It is important to emphasize: the interest rate cut yesterday will eventually bring buyers back to the market. This does not yet mean that we are close to a surge in demand - moreover, it is very possible that we are even very far from that. However, every interest rate cut creates broader possibilities for buyers. As we published this morning, some buyers have saved hundreds of shekels and even more than a thousand shekels in some cases, since the wave of cuts that began in November.