Netivot Leads Southern Israel with 43% of Real Estate Cancellations
Netivot accounts for 43% of all real estate transaction cancellations in southern Israel, far exceeding its market share. The Ministry of Finance reports a high regional cancellation rate of 7%.
The southern city of Netivot has experienced a dramatic surge in real estate transaction cancellations, accounting for 43% of all canceled new home purchases in southern Israel. This figure is disproportionately high compared to Netivot's 25.8% share of total developer sales in the region. The data was revealed by Galit Ben Naim, Deputy Chief Economist at the Ministry of Finance, during the Israel Real Estate Conference hosted by Globes and Bank Leumi.
Following Netivot, Eilat recorded the second-highest cancellation rate in the south at 18%, followed by Ofakim at 8.8%. Other southern municipalities, including Beer-Sheva, Ashkelon, Kiryat Gat, Dimona, and Sderot, registered single-digit cancellation rates. Ben Naim noted that while specific developers were not named, the phenomenon is heavily concentrated among private construction firms.
Unprecedented Cancellation Rates in the South
According to Ben Naim, the overall cancellation rate in southern Israel has reached an exceptionally high level of 7% of all transactions.
Galit Ben Naim stated:
"It is possible that apartments were sold without verifying whether any initial payment was made, or they assumed a buyer would eventually materialize. The current 7% cancellation rate in the south is extremely high, especially when compared to the peak market days of 2021, when southern cancellations accounted for a mere 0.5% of the national total."
Furthermore, the frequency of second-hand homes sold at a real capital loss in the south remains high, sitting in the double digits. Conversely, cities such as Arad, Holon, and Haifa have seen a significant decrease in the share of second-hand properties sold at a loss.
Market Evolution and Financing Schemes
Unlike the Central Bureau of Statistics (CBS), the Chief Economist’s Office directly analyzes transaction documents to monitor financing terms and deal structures. Ben Naim outlined how the Israeli real estate sector shifted from its post-pandemic peak to a period of stagnation over the last five years.
In August 2020, lowering the purchase tax to 5% accelerated transactions, leading to a record 55,000 deals in 2021, of which 36,000 were on the free market. Today, free-market sales have dropped to just 22,000 units annually. Subsequent interest rate hikes by the Bank of Israel reversed this trend, a decline that accelerated with the outbreak of the war in October 2023.
By early 2024, aggressive developer financing benefits temporarily boosted sales, leading to an all-time high for new home sales in the south, with 6,500 free-market units sold in the first quarter alone.
By December 2024, half of all new apartments were sold using developer-subsidized financing schemes. This share dropped to 20% in May 2026 and rose slightly to 27% in July 2026. The market has since slowed down following the implementation of regulatory restrictions on these financing benefits in early 2025.
