The 2026 Wave of Real Estate Transaction Cancellations — What It Means for Buyers and Sellers in Bik'at Ono

What's Happening — The Numbers Behind the Cancellation Wave

In 2022–2023, as the Bank of Israel raised interest rates sharply from 0.1% to 4.75%, many developers offered aggressive financing plans to maintain sales volumes. The popular 80/20 and 90/10 models allowed buyers to pay just 10–20% upfront and defer the remaining 80–90% for 2–4 years until apartment delivery.

The concept seemed attractive: buyers would have time to save, prices would presumably rise, and everything would work out. Reality proved otherwise. Interest rates didn't drop fast enough, apartment prices didn't surge as expected, and many buyers reached payment day without the ability to complete the purchase.

Most 80/20 transactions were signed in late 2023 and early 2024. With a 3-year delivery timeline, the peak of the cancellation wave is expected in mid to late 2026. This trend hasn't peaked yet — it's still building.

80/20 and 90/10 Financing Plans — What They Are and Why They're Risky

In the 80/20 model, the buyer pays 20% of the apartment price at contract signing and the remaining 80% only upon receiving the keys — typically 2–4 years later. The 90/10 model is even more extreme: just 10% upfront.

The core risk: the buyer commits to a fixed price, but their financing capacity changes over time. If interest rates rise, income drops, or the bank refuses to approve a mortgage at favorable terms — the buyer is stuck. The deposit they paid (10–20%) becomes the developer's agreed compensation.

In December 2024, the Bank of Israel issued a temporary directive limiting financing promotions until the end of 2026. Balloon loans subsidized by developers are limited to 10% of total monthly mortgage activity, and banks must allocate higher capital (150%) for projects where more than 25% of transactions include significant payment deferrals.

What this means in practice: developers find it harder to offer financing deals, slowing sales pace. But it also protects new buyers from entering unaffordable transactions.

Cancelling a Developer Deal — Rights, Costs, and Process

If you've signed a contract to purchase a new apartment and are considering cancellation, it's crucial to understand the full picture. Cancelling a real estate deal is not simple and has significant financial consequences.

The agreed compensation in developer contracts is typically 10% of the transaction value. On a NIS 3 million apartment in Kiryat Ono, the developer retains approximately NIS 300,000. However, before the developer can claim this compensation, they must send a 14-day notice during which the buyer can remedy the breach.

Regarding purchase tax (mas rechisha) — there's good news. A buyer who cancels can apply to the tax authority using Form 6130 and receive a full refund of the purchase tax paid, including CPI adjustments and 4% annual interest. The process should take 90 days from document submission, though delays can occur.

Key recommendation: always consult a real estate attorney before cancelling. In many cases, negotiation with the developer is possible — especially when the developer prefers to quickly resell the apartment. Sometimes the actual compensation is lower than 10%, or alternative arrangements can be reached.

What This Means for Buyers in Bik'at Ono — Opportunities and Risks

If you're considering buying an apartment in Bik'at Ono right now, the cancellation wave creates an interesting market situation. On one hand, there's pressure on developers to sell, which may open room for negotiation. On the other, you need to know what to watch for.

In Kiryat Ono, new apartment prices range from NIS 2.4–2.8 million for 3 rooms and NIS 3.0–3.4 million for 4 rooms. In Ganei Tikva, new 3-room apartments cost around NIS 2.5 million and 4-room units around NIS 3.4 million. Some projects are struggling to sell — in one Kiryat Ono project, 70 apartments remain unsold with only 3 sold in the entire past year.

With 86,000 new unsold apartments across Israel and developers feeling cash flow pressure, there's room for negotiation. But know the difference: a real discount is a price reduction, not a financing promotion that defers the problem forward.

A clear trend: the share of resale purchases rose from 60.6% to 70.2% of all transactions. Buyers prefer existing apartments — immediate move-in, known price, no gamble on the future. In Bik'at Ono, where the resale market is active, this trend is especially pronounced.

What This Means for Sellers of Resale Apartments in Bik'at Ono

If you have an apartment for sale in Bik'at Ono, the cancellation wave in new construction actually works in your favor — at least in the short term. Data shows buyers are shifting to the resale market, with second-hand transaction share rising significantly.

The reasons are clear: buyers want certainty. A resale apartment in Kiryat Ono offers immediate occupancy, an established neighborhood, and no gamble on delivery dates. In a market where 86,000 new apartments sit unsold and 1,438 transactions have been cancelled, certainty is worth money.

However, buyers who've been burned by developer deals come to the resale market more cautious. They investigate more thoroughly, negotiate harder, and demand full transparency. Sellers who price correctly and present their property professionally will sell quickly. Those demanding inflated prices will sit with their property for months.

Resale prices in Kiryat Ono average NIS 30,000–32,000 per sqm. A 4-room apartment (100 sqm) sells in the range of NIS 2.5–3.2 million, depending on neighborhood, floor, and condition. That's less than new construction — and that's exactly what attracts buyers.

Interest Rates, Forecasts, and What's Coming Next in 2026

The Bank of Israel rate stands at 4.0% as of March 2026, with the prime rate at 5.5%. The Bank's research division forecasts rates dropping to 3.5% by year-end — meaning two more quarter-point cuts. For every NIS 1 million in mortgage on the prime track, that saves approximately NIS 300 per month compared to peak rates.

The outlook for the coming year: prices are expected to stabilize in the first half and rise moderately in the second half. Developer financing restrictions will continue through end of 2026, slowing new apartment sales without stopping them entirely. The rental market continues surging — 6% increase for new tenants in January 2026 — pushing renters to consider buying.

For Bik'at Ono specifically, new projects continue — Umami in Kiryat Ono (518 units), HaMeshi in Ganei Tikva, and urban renewal projects in older neighborhoods. But sales pace is slow, and some developers are willing to negotiate. Those who buy wisely during this period may be well-positioned when the market recovers.