Buyers paying tens of thousands of shekels to exit off-plan apartment deals
Data from the Ministry of Finance reveals that many buyers canceling apartment deals faced financing difficulties, often having paid nothing prior to cancellation. While sales contracts typically include a 10% penalty, sellers frequently waive the full amount or accept partial compensation.
The data on deal cancellations published in the Ministry of Finance's real estate review in June received a deeper analysis this weekend from Galit Ben Naim, Deputy Chief Economist. In a social media post, Ben Naim focused on two central aspects: the reasons for deal cancellations and the amounts buyers are required to pay, or in many cases, manage to avoid.
According to the Chief Economist's tracking, 1,294 deal cancellations were recorded in January for transactions made between 2023 and 2025. By August, that number jumped by 41% to 1,821, largely driven by financing promotions.
Ben Naim highlighted that two phrases appeared repeatedly in the cancellation documents: "since the buyer paid nothing for the apartment" and "since the buyer notified the seller that they are unable to complete the purchase."
Data from the South, which leads with 475 cancellations for deals signed in 2023-2025, illustrates this trend. Ben Naim notes that in about two-thirds of these cases, the reason reported to the Tax Authority was financial difficulty. Justifications ranged from "mortgage denial" to "inability to finance the purchase." She further noted that even when buyers received contractor loans—where the contractor covers interest—it was often insufficient to complete the deal.
Another figure concerns the amounts paid prior to cancellation. In one-third of canceled deals in the South, buyers paid nothing. When including deals where only tens of thousands of shekels were paid, the rate reaches half of all cancellations.
Ben Naim emphasized that this phenomenon is not limited to the periphery. She cited a luxury deal in Tel Aviv signed in late 2024 that was recently canceled due to "financial difficulties," where the buyer had also paid nothing prior to the cancellation.
Finally, she addressed the cost of exiting a deal. Sales contracts usually include an agreed compensation of 10% of the apartment price, which can amount to hundreds of thousands of shekels. However, many cancellation agreements included the phrase "ex gratia" (Lpnim Mshurt Hdin), with sellers waiving the penalty or settling for partial payment.
"In the South, the average compensation in canceled deals stood at only about 20,000 shekels," Ben Naim notes.
She stresses, however, that this average is heavily influenced by cases of full exemption. In other instances, buyers were required to pay 200,000 shekels or more, and in one Tel Aviv case, the compensation reached approximately half a million shekels.
