Preshkovsky Launches Auction for Hundreds of Apartments, Potentially Raising Prices

Preshkovsky, a construction company, is launching a new campaign inviting potential buyers to compete in an auction for the right to purchase one of hundreds of apartments. The auction, starting on August 9 at 19:00 and lasting three days, covers 373 apartments, with 357 offered in a pre-sale phase that typically includes discounts. However, the competitive auction format may reduce these discounts as buyers bid against each other, potentially driving prices higher.

The pre-sale stage is crucial for developers because it secures bank financing necessary to start construction. Banks usually require about 15% of apartments to be sold early to minimize risk and confirm property valuations. Success in this phase affects loan interest rates and the equity developers must invest. Given a sluggish market and reduced demand in recent years, developers like Preshkovsky are adopting creative sales methods to attract buyers.

Each apartment has a minimum price set 10% to 15% below the official price list. Buyers must deposit a 25,000 shekel guarantee to participate, which covers bids on up to three apartments, with the option to submit additional guarantees for more units. Buyers can review apartment details, contracts, and relevant documents on a dedicated auction website before submitting confidential bids.

Experts advise buyers to set a maximum price in advance to avoid overpaying, suggesting discounts of 8% to 10% for apartments ready for delivery soon and 12% to 15% for those delivered by 2029, accounting for financing costs and market risks. Additional costs like purchase tax, legal fees, indexation, and financing until occupancy should also be considered.

Preshkovsky offers favorable financing terms requiring only 20% payment upfront and 80% upon receiving the keys, with a 3% surcharge for this option. Buyers can compare prices using the Israeli Tax Authority’s real estate data website. An AI-generated table listing all auction apartments with calculated price per square meter, including adjustments for balconies and gardens, is also available online.