Israeli Real Estate Developers See Sales Jump, But Recovery Remains Uneven

Publicly traded real estate developers in Israel sold 1,571 apartments in the second quarter of the year, a 36% increase compared to the first quarter's 1,158 units. However, this improvement is viewed with caution, as the first quarter was particularly weak. When compared to the average sales of these 17 companies over the past 12 quarters, the second quarter's sales are still down by approximately 2%. Only five of the companies managed to sell at a pace higher than their historical average.

The data, compiled by Avi Shakuri, a senior analyst at Psagot Sigma Brokerage, reveals that while the overall sales figures show an increase, the recovery is not widespread. The average sales for these companies over the last 12 quarters stand at 1,604 apartments per quarter, meaning the sector is still 33 units short of this benchmark. The median company sold only about 70% of its average quarterly sales pace.

Shikun & Binui stood out with 309 apartment sales in the second quarter, a significant jump from 33 in the first quarter and a 12-quarter average of 75. Damari followed with 231 units, closely matching its historical average of 229. Amram sold 199 units, an increase from 108 in the first quarter but still below its average of 284. However, a significant portion of Shikun & Binui's and Amram's sales were attributed to government-subsidized "Price for the Resident" housing programs.

Excluding Shikun & Binui's 309 units, the remaining companies sold 1,262 apartments, about 17% below their 12-quarter average. The improvement from the first quarter, in this adjusted view, shrinks to about 12%. This suggests a partial recovery, but not a full return to normal sales activity. Concentration is also increasing, with the top five sellers accounting for 64% of all sales.

In the Tel Aviv neighborhood of Shdei Dov, five public company projects with a total of 1,903 apartments have seen 678 units sold, a 35.6% marketing rate. Israel Canada leads with a 60% marketing rate for its Rainbow Tel Aviv project, selling 275 out of 459 units at an average price of approximately NIS 81,700 per square meter. In contrast, Damari has only marketed about 9% of its Yama Dimri Shdei Dov project, despite having the highest price per square meter at approximately NIS 82,600. The data indicates that pricing alone does not explain sales pace, with factors like apartment mix and project launch timing also playing crucial roles.