Foreskavsky Digital Tender Sells Only 14% of Apartments Amid High Marketing Costs

Foreskavsky's digital tender, which concluded on August 12, offered 373 apartments across six projects in Tel Aviv, Herzliya, Haifa, and Ashdod. The campaign generated significant exposure, but ultimately resulted in the sale of only 53 apartments, representing just over 14% of the available inventory. While 53 sales in the current stagnant market are not insignificant, the failure to sell 320 apartments, even with minimum prices up to 10% below list price on some units, highlights a disconnect between developer pricing and buyer willingness.

The real estate sector in Israel has seen a surge in creative marketing tactics, including 20/80 payment plans, developer loans, subsidized interest rates, and now digital tenders. However, the article argues that the fundamental issue is not a lack of awareness but a gap between the prices developers demand and what buyers can or are willing to pay. The Foreskavsky tender, despite attracting over 100,000 website visits, demonstrated that interest does not automatically translate into a sale.

A significant aspect of the tender was its marketing expenditure. Typically, marketing budgets in real estate are around 2-3% of sales. Foreskavsky reportedly spent approximately 15 million shekels on the campaign, leading to about 160 million shekels in actual sales. This equates to a marketing cost of roughly 9.3% of sales, or about 283,000 shekels per apartment sold. This raises the question of whether a portion of this substantial marketing investment could have been more effectively used as a direct price reduction.

While developers face constraints such as bank loan agreements and commitments to previous buyers that can limit immediate price cuts, the economic reality remains. The article concludes that the 53 apartments sold are less significant than the 320 that were not. The tender underscores that while marketing can attract potential buyers, the final decision hinges on price, suggesting that direct price reductions might be more effective than elaborate marketing schemes when buyers are hesitant.