86,000 Unsold New Apartments in Israel — What It Means for Buyers and Sellers in Bik'at Ono

Israel's New Apartment Inventory in 2026 — The Numbers Every Buyer Should Know

The number 86,290 represents more than a statistic — it reflects a structural shift in Israel's housing market. By the end of January 2026, the number of unsold new apartments reached an unprecedented high. Supply months stand at 31.4, meaning it would take over 2.5 years to sell all existing inventory at the current pace. In a healthy market, this figure typically ranges between 8 and 14 months.

This situation results from a combination of aggressive construction during 2021–2023, sharp interest rate increases that pushed many buyers out of the market, and the impact of the war on consumer confidence. Contractors who planned projects during the boom now face growing inventory.

Tel Aviv faces the most extreme situation — at current sales pace, it would take approximately 6 years to clear inventory. The Central District, which includes Bik'at Ono, is in better shape but still well above historical norms.

How the Inventory Glut Affects Bik'at Ono — From Kiryat Ono to Or Yehuda

Bik'at Ono isn't isolated from national trends, but it has its own local dynamics. Kiryat Ono currently has approximately 36 active projects at various stages, with new apartments priced between ₪2.2–5 million. The average apartment price in the city is ₪3.25–3.4 million, with per-square-meter prices of ₪31,000–34,000.

What's happening on the ground: contractors who built expecting strong demand are finding slower sales than anticipated. The result — promotions, negotiation flexibility, and willingness to make concessions that would have been unthinkable two years ago. In Pisgat Ono, for example, contractors offer up to 70% financing with just 15% down at signing.

The dynamics vary by city. Or Yehuda, with the massive Neve Ayalon project (2,250 units), faces significant inventory pressure. Ganei Tikva, with limited new supply, feels less impact. Yehud-Monosson, with its train station proximity, maintains relatively stable demand.

Contractor Financing Deals (80/20) — What's Really on the Table and What Are the Risks

The 80/20 (or 90/10) financing model has become contractors' primary sales tool. The concept: buyers pay just 10%–20% at signing, with the balance due at delivery in 2–3 years. It sounds attractive — enter a home with relatively low equity and buy time to save or sell an existing property.

However, the Bank of Israel recognized systemic risk. In March 2025, banking supervision imposed restrictions on these deals — a temporary order valid through end of 2026. The restrictions include increased capital allocation requirements for banks and a cap on subsidized balloon loans at 10% of each bank's total monthly mortgage volume.

Despite restrictions, contractors have found workarounds. Reports indicate that financing benefits actually increased after an initial decline, with some contractors offering direct loans (bypassing banks) and others structuring benefits to fall outside the restriction definitions.

The key insight for buyers: a financing deal is not a discount. An apartment offered at ₪3 million with 20% down (₪600,000) and the balance in 2.5 years has a present value of approximately ₪2.82 million — an effective discount of 6%–7%. But if interest rates drop as expected, the effective discount shrinks. And if you can't make the large payment at delivery, you're in serious trouble.

Deal Cancellations — The Wave Still Coming in Mid-2026

One of the most concerning trends in the new apartment market is the surge in deal cancellations. According to the Chief Economist, cancellation rates jumped 620% within two years. Of all transactions signed in 2023, 1,300 were cancelled by January 2026 — a rate of 3.6%. The breakdown: 744 from 2023 contracts, 562 from 2024, and 132 from 2025 (as of March 2026).

In two-thirds of cases, the reason reported to the Tax Authority was 'financial difficulties' — primarily inability to obtain mortgage approval or meet the contractor's payment schedule.

But the bigger wave is still ahead. Most 80/20 deals were signed in late 2023 and early 2024. Three years forward brings us to mid-to-late 2026 — where analysts expect a significant wave of cancellations, forced sales, and deeper parental involvement in mortgages.

For sellers: cancelled deals return apartments to contractor inventory, increasing competition further. For buyers: due diligence is essential. Sale Law guarantees protect you from contractor bankruptcy (maximum 7% payment at signing without guarantee), but not from interest rate changes or property value decline.

New vs. Second-Hand — Which Is Better in Today's Market

The 2026 market has reshaped the relationship between new and second-hand apartments. New apartment share dropped from 39.4% of all transactions (H1 2024) to 29.8% (H1 2025). Buyers are increasingly choosing second-hand — and for good reasons.

New apartments from contractors typically cost 10%–15% more than comparable second-hand units, with gaps reaching 20%–30% in some areas. Financing deals narrow the gap in present-value terms, but they also obscure the true price. In Gush Dan, second-hand sellers who didn't need to sell simply waited, creating relative price stability in the resale market.

Our recommendation: in today's market, explore both options. Don't assume new equals better or that second-hand equals automatic savings. Each transaction requires individual analysis. In neighborhoods like Kiraon and Pisgat Ono, the difference between new buildings with mamad and older buildings without can significantly affect value.

2026 Market Forecast — What to Expect in Coming Months in Bik'at Ono

The Bank of Israel cut rates twice in succession — from 4.5% to 4.25% in November 2025, then to 4.0% in January 2026. Rates were held steady in February, but the Bank's research division forecasts a decline to 3.5% by year-end. Each quarter-point cut saves approximately ₪151 per month per million NIS on a prime-rate mortgage.

The consensus forecast: price declines will stabilize in the near term, sales will pick up in the second half of 2026, and prices are expected to rise 4%–6% with the anticipated rate cuts — assuming security conditions remain stable.

However, the massive inventory won't disappear overnight. Even with rate cuts, 86,000 unsold apartments take years to absorb. This means the current buyer's window — with significant negotiating power — is expected to remain open through at least the end of 2026. After that, as rates drop further and demand increases, the window will begin to close.

In Bik'at Ono, fundamental demand remains strong: proximity to Tel Aviv, transportation infrastructure (Purple Line planned, Route 461), good schools, and established communities. Prices are unlikely to crash — but they're expected to remain moderate in the near term, especially in the new apartment market where contractors are under pressure to move inventory.