Israeli Housing Market Sees Wild Swings Driven by Aggressive Developer Promotions

Israel's real estate market experienced significant volatility in the second quarter of 2026, with apartment sales fluctuating dramatically between developers. While in typical years the market saw moderate, single-digit growth, recent sales figures show companies achieving hundreds of percent increases or suffering double-digit declines. This instability is largely attributed to aggressive, targeted promotions by developers seeking to boost sales amidst financial pressures.

Companies are increasingly relying on special offers, sometimes at the expense of their own profitability, to avoid near-total sales stagnation. The primary focus for developers has shifted from detailed financial analysis to simply maximizing apartment sales, as their ability to service bank loans is directly tied to their sales volume. This sales performance is described as essential "oxygen" for developers.

Notable examples include Tedhar, which sold 279 apartments in Q2 2026 after only 15 in Q1, a 1760% increase, largely due to a promotion for its "Bein Ha'Sderot" project. Shikun & Binui reported an 850% jump in sales, selling 314 apartments in Q2 compared to 33 in Q1, partly attributed to a promotional offer including a trip to Thailand. Aura also saw significant sales boosts from promotions, including a joint campaign with the "Hever" club.

However, the article cautions against comparing sales across different project types and locations, as high-value projects like Sde Dov carry more weight than those in less prime areas. Dori, for instance, saw a sales increase but no sales in its key YAMA project at Sde Dov, with one prior deal canceled.

There is also a growing trend of deal cancellations, which companies are now required to disclose by the Israel Securities Authority. While currently a small percentage, the full impact of cancellations, especially for deals made during periods of extensive financing incentives like the 20/80 or even 5/95 schemes, will only become clear in the next one to two years. Developers continue to offer various financial incentives, such as covering indexation costs or subsidizing interest, to stimulate demand and avoid official price reductions.