Transaction cancellations in the housing market are a marginal and localized phenomenon, according to data from Mizrahi-Tefahot, and do not indicate a crisis or collapse. Rather, they reflect targeted adjustments in a market currently experiencing a period of moderation. So what is the outlook for prices?

Contrary to headlines suggesting that a wave of transaction cancellations is creating a dramatic atmosphere in the housing market, the actual data paints a much more balanced picture. According to Shevy Shemer, Vice President and Head of the Retail Division at Mizrahi-Tefahot, the rate of transaction cancellations in the market is extremely low and does not indicate a deep crisis. "Headlines about numerous cancellations do not tell the whole story. In the end, it is less than half a percent of all transactions executed," Shemer said at the annual conference of the Association of Mortgage Advisors.

She explained that most cancellations recorded over the past three years were isolated and occurred mainly in large projects in the south, in relatively low-priced apartments. "In most cases, the developers managed to resell the apartments to other buyers, so these are not transactions that disappeared from the market, but rather a reshuffling within the existing inventory," she clarified. In her view, presenting the data without a broader context creates a misleading impression of turbulence in the market.

Shemer emphasized that the housing market is in a period of moderation, but not of abrupt change. Looking back over the past year, she said apartment prices have barely changed, and the national data hides significant regional variation. While the central region and Tel Aviv experienced a moderate decline, Haifa, the north, and Jerusalem saw price increases. According to her, the reason lies in the supply structure: Most of the unsold inventory is concentrated in high-priced apartments in the Tel Aviv district, whereas in the periphery, the inventories are lower. At the same time, demand is focused on relatively small apartments with a secure room (Mamad) – a segment where demand has not weakened.

"The Default Rate Actually Improved"

Even in the mortgage market, according to data presented at the conference, there are no signs of a systemic crisis. Shemer referred to an increase of about 1.6 billion NIS in defaults over 90 days in 2025 compared to 2019, but noted that at the same time, the mortgage portfolio in the banking system grew by about 76%. This means that the default rate actually improved, standing at about 0.67%, compared to 0.74% in 2019. She also noted that in subsidized developer loans, about 40% of clients repay the balloon loan early, while about 60% refinance it – data that does not support a scenario of widespread distress.

Alongside Shemer, Dror Feldman, Head of the Mortgage Division at Mizrahi-Tefahot, presented a relatively positive macro picture. Feldman noted that 2025 ended with a total mortgage volume of approximately 106 billion NIS – the highest figure since 2022 – and emphasized that the Bank of Israel’s rate cut at the end of the year served as a significant catalyst for activity. According to him, assuming security stability, continued interest rate cuts, and a gradual return of buyers to the market, 2026 is expected to show similar or even slightly higher activity volumes than 2025.