The continuing stagnation in Israel’s residential real estate market, combined with an inventory of thousands of new unsold apartments, is pushing developers to expand their marketing toolbox and devise increasingly unusual offers in efforts to bring buyers back to the market. If in the past, financing promotions, payment deferrals, and flexible payment terms were considered the main tools for encouraging purchases, today some companies are moving to much more creative and aggressive moves.
One of the most notable recent promotions was the "Apartment as a Gift" campaign by the City People development company, which ended last Friday. As part of the campaign, which was launched in February, the company promised that one of the first 50 buyers to purchase an apartment in one of the company's projects in Tel Aviv’s Rova 3 and Rova 4 would receive a two-room apartment near Kikar Hamedina, worth an estimated NIS 2.5 million, as a gift. Ultimately, the winner of the apartment was Aliza Deri, 64, who purchased a three-room apartment in one of the company's projects.
Despite the uniqueness of the move, the impact on sales was relatively limited. The campaign was originally planned to end in mid-June, but according to the company's reports for the first quarter of the year, only a few apartments were sold. City People explains that the extension of the campaign was due to the Iran war, which lasted about two months and weighed on market activity. However, even after its extension, the company reported that throughout the entire campaign period, only 13 apartments were sold, for a total of about NIS 112 million, at an average price of about NIS 75,000 per square meter.
From the company's perspective, however, the campaign was defined as a success. According to Ron Chen, CEO and founder of City People, the goal of the campaign was not necessarily to generate new demand. "The goal was for those who are already on the market and looking for an apartment in central Tel Aviv to come to us. From our perspective, the campaign achieved this goal," he said.
City People is not alone
On the low number of apartments sold in the campaign, Chen stresses, "We look less at the number of apartments and more at their value. After all, these are luxury apartments, many of them at prices approaching NIS 10 million, so from our perspective, this is a successful campaign, especially at a time when there were almost no deals in the area for months due to the war." According to him, City People insists that interest persists even after the campaign has ended, and it is likely that the company will continue with additional creative marketing moves.
City People’s story is by no means an isolated case. Marketing campaigns have become a main tool in the developers' battle for every buyer in the past year. The Ministry of Finance chief economist’s May real estate review reported that Tel Aviv led sales of new homes in Israel with 1,137 homes bought in March-May. However, a large part of the jump was due to just two sales operations, - the Sde Dov project and a Tidhar urban renewal project, in partnership with developer Nehemiah Davidi, which boosted the number of new apartments sold in Tel Aviv from 150 in May 2025 to 481 in May 2026.
"In the current market conditions, if you don’t shout loudly, no one listens," says Snir Real Estate Marketing Group owner and CEO Nir Shmoul. "That’s why we’re seeing more and more moves like lotteries, digital auctions and extraordinary promotions. The aim is to create buzz, but in the end, the gimmick is just the means, what matters is the price. Anyone who gives a significant discount manages to sell, and each developer chooses a different way to provide it, whether through a trade-in, a tender, a lottery or a financing benefit."
Another example of an attempt to break the sales stalemate came last weekend from Prashkovsky (TASE: PRSK), which launched a 72-hour "digital auction," which will open on August 9. As part of this, participants will be able to submit bids for apartments in the company's projects, and a minimum price that is 10% lower than the market price has been set for each apartment. The minimum price for a three-room apartment in the HaGaDa project on Bnei Dan Street in Tel Aviv was set at NIS 5.2 million, in Glil Yam in Herzliya at NIS 3.12 million, and in Lincoln Hills in Haifa at NIS 1.98 million. The market received the move negatively. Prashkovsky's stock fell 5% after the announcement, due to concerns the offer reflects difficulty in selling homes.
Banks are scrutinizing carefully
Even when developers manage to report good sales through aggressive promotions, the banks examine the deals with a magnifying glass. Hagag Group (TASE: HGG) recently received an additional extension to meet the conditions of the bank support for the luxury project Masterpiece Bavli (Bavli 3) in Tel Aviv., which is financed by Bank Hapoalim and Mizrahi Tefahot Bank.
Although Hagag reported sales agreements worth about NIS 549 million, above the required sales threshold, the banks did not recognize a significant portion of the deals for the purpose of meeting the conditions of its support. The reason: deals worth about NIS 381 million included possible grounds for cancellation by the buyers, or because the equity provided by the buyers as part of the deals was less than 15% of the deal value.
Hagag stressed that a large part of those grounds for cancellation stem from waiting to receive a revised building permit for the project, which includes adjustments to land use. At least in this case, the story ended with agreements between the company and the banks, so that support for the project is expected to continue.
However, it may signal a change in the banking system's approach. Even when the volume of sales on paper seems sufficient, banks are currently carefully examining the quality of the deals, the percentage of equity provided by the buyers, the existence of grounds for cancellation, and the degree of certainty that the deals will be completed.
Adv. Elnatan Haiu explains, "Aggressive financing operations may create an appearance of demand and sales, even though in reality some buyers are unable to complete the deal.In a situation where the buyer must bring low equity in the early stages of the deal, and the remaining payment only at a future date, there is actually a risk that the bank will not approve the provision of the mortgage and the buyer will not be able to bring the remaining equity. In such a situation, the deal may be canceled, the apartment returns to the developer, and the sale turns out to be a sale on paper only."
Published by Globes, Israel business news - en.globes.co.il - on July 27, 2026.
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