Major Shift in Jerusalem’s Real Estate: What the New Payment Plans Mean for Buyers
If you’ve been thinking about purchasing a new home or investment property in Jerusalem, there’s an important shift happening behind the scenes—one that could significantly affect your buying power and the timing of your next move. Developers are quietly moving away from the generous 10/90 and 20/80 payment plans that have made buying new properties more accessible for many due to new Bank of Israel regulations. This will lead to significantly less low upfront payment structures—and this is going to change the landscape in terms of off plan property purchases.
For years, these flexible payment plans allowed buyers to pay just 10% or 20% upfront, with the remaining balance due only when the project was completed—often years later. This structure gave families, first-time buyers, and investors alike the ability to enter the Jerusalem real estate market without having to front a massive amount of capital. It was especially attractive in a high-cost market like Jerusalem, where affordability is often a major concern.
But things are changing.
What’s Driving This Shift?
The change has been spurred in large part by new regulations from the Bank of Israel, which aim to create a more balanced and risk-averse real estate market. As part of this initiative, banks are tightening lending rules for developers, which in turn makes it harder for those developers to offer extended payment plans to buyers. To compensate, many developers are now requiring larger payments upfront to ensure sufficient cash flow throughout the building process.
Compounding this issue is the rise in interest rates. Financing has become more expensive across the board, and developers are less inclined to carry the financial burden of long-term deferred payment structures. Their solution? Secure more of the purchase price early in the sales cycle to reduce exposure and reliance on external lending.
This means that the days of securing a home in a sought-after Jerusalem neighborhood with just a 10% down payment may soon be over. And once these new norms become industry standard, it could be much more difficult—if not impossible—for some buyers to break into the market at all.
What Does This Mean for You?
In practical terms, this shift means that your window of opportunity may be closing. While some developers still offer the older, more flexible payment schedules, those deals are becoming increasingly rare. In highly desirable neighborhoods such as Arnona, Talpiyot, Katamon, and even some parts of Baka, there are still a few projects with attractive terms—but they won’t last much longer.
If you're planning to purchase a new home or investment property in Jerusalem within the next year or two, now is the time to act. Locking in a project with a favorable payment plan could not only save you from needing to come up with a large sum upfront, but also give you breathing room while the property is being built—time to plan, budget, and secure financing on your own terms.
This is particularly crucial for investors, who often depend on optimized cash flow. By purchasing now under the more flexible plans, investors can minimize initial outlay while benefiting from continued price appreciation and high demand in the Jerusalem market. Once the new payment models become the norm, investment entry will require much more capital, reducing accessibility and potentially lowering returns.
Looking Ahead
Jerusalem remains one of the most dynamic and resilient real estate markets in Israel. Demand continues to outstrip supply, especially in neighborhoods with strong communities, good schools, and access to the city’s cultural and religious hubs. As new infrastructure and urban renewal projects enhance the city’s appeal, property values are likely to continue rising.
However these market fundamentals also mean that developers will have less incentive to offer buyer-friendly financing terms moving forward. The more the market favors sellers, the fewer perks they need to offer to close a deal. We’re already seeing this begin to play out across multiple projects—and once this becomes the new standard, buyers who delayed may find themselves priced out of the opportunities they once had.
For those following the Jerusalem real estate market, these changes mark an important transition. The flexibility that once characterized many new development payment plans is becoming less common, and that will likely reshape how—and when—people choose to buy.
As always, staying informed is key. Exploring what’s currently available and being aware of how payment structures are shifting can make a real difference—whether you're buying for personal use or with long-term investment in mind.
This article is based on insights gathered from a recent report by Ynet. For more details, read the full articlehere.