Y.H. Damari Faces Profit Decline and Falling Prices in Tel Aviv Luxury Market

Y.H. Damari's second-quarter 2026 financial report reveals a significant drop in profitability, with net profit for the first half of the year more than halved compared to the same period last year. Although the company sold 397 apartments in the first half, up from 335 previously, much of this increase came from discounted units under the "Price for Residents" program in Kiryat Bialik. In contrast, the flagship project at Sde Dov in Tel Aviv sold only 10 units in the first half, and the company expects future prices per square meter there to decline.

Damari currently manages 23 projects nationwide, totaling 5,086 housing units (4,661 attributable to the company), with 1,523 units sold so far (1,401 company share). Key sales areas include Ashkelon (144 units), Ofakim (72), Kiryat Bialik (63), and Kiryat Gat (27). The Sde Dov project, however, struggles with only 40 of 455 units sold to date, and the average price per square meter for remaining inventory has been lowered from 67,000 to 62,000 shekels.

Alongside financial challenges, Damari disclosed an environmental issue at Sde Dov involving PFAS soil contamination from firefighting foam. The Ministry of Environmental Protection approved soil removal to an authorized site in July 2026, with ongoing excavation and containment work. Further tests in August revealed additional contamination hotspots, and the company awaits updated instructions on cleanup scope and final disposal. Damari estimates the total remediation cost will not be significant relative to the project's scale, and work continues under ministry supervision.

This report highlights the difficulties in Tel Aviv's luxury real estate market and the impact of environmental concerns on development projects.