80/20 and 90/10 New-Build Deals in Israel: What Buyers Should Check First

The 80/20 and 90/10 signal Israeli new-build buyers should read first

• Israeli developers are using deferred-payment structures, such as 80/20 or 90/10 deals, to attract buyers without openly lowering list prices.
• The Bank of Israel has warned that developer credit risk rose as demand for new dwellings weakened, unsold new homes reached record levels, and some sales campaigns allowed substantial payment deferral. (boi.org.il)
• Ynet reported that, as of the end of 2025, 44% of projects financed by Israel’s five largest banks had construction progress running ahead of sales. (ynetnews.com)
• Deferred terms can be valuable, but they may also shift risk to the buyer if the final payment depends on future mortgage approval, currency rates, resale liquidity, or interest rates.
• Serious buyers should negotiate the full structure: price, payment schedule, index exposure, upgrades, parking, storage, legal costs, handover timing, and exit flexibility.
• a deferred-payment offer is not automatically a discount, but it often reveals where the developer may have pressure behind the asking price.

A developer rarely says, “We are under pressure.” Instead, the pressure may appear inside the payment plan. If a project offers 10% now and 90% near delivery, that can be convenience — or it can be a sign that sales are slower than the brochure suggests. For buyers, the opportunity is not to chase slogans. It is to read the structure.

How deferred-payment offers change the negotiation map

• The public price may stay firm while the private economics move.
• Payment timing can be as important as the headline shekel price.
• Projects with construction ahead of sales may have stronger motivation to close serious buyers.
• A cheap-looking 90/10 deal can become expensive if indexation, rates, or currency move against you.
• The best negotiation is usually package-based, not one-dimensional.

Why developers protect the price but adjust the deal

In a slower market, many developers prefer not to advertise price cuts. Public discounts can affect the perceived value of the whole project, upset earlier buyers, weaken appraisals, and create pressure from brokers and competing buyers.

So instead of cutting the list price, they may offer:

• Lower initial equity.
• Deferred balance until delivery.
• Partial protection from the Construction Input Index, known in Hebrew as Madad Tsumot HaBniya.
• Better parking or storage terms.
• Kitchen, flooring, air-conditioning, or electrical upgrades.
• Reduced legal or registration-related costs.
• Flexible payment milestones.
• Higher broker commissions to move inventory.
• Whatever the bundle, break each benefit (parking, storage, appliances, air-conditioning, kitchen, smart-home) into a line-item cash value, and weigh it against hidden costs such as lawyer fees, registration and Taba paperwork, betterment levy, and connection and management fees.

That does not mean every developer is distressed. Strong projects in prime locations can still sell without much flexibility. But in projects where inventory is sitting, deferred-payment deals can expose a gap between the marketing message and the developer’s real need to sign contracts.

What does an 80/20 or 90/10 deal actually mean?

An 80/20 deal usually means the buyer pays 20% near contract signing and 80% later, often close to delivery. A 90/10 deal usually means 10% upfront and 90% near completion.

These offers became popular because they reduce the buyer’s immediate cash burden. They can help buyers who want to lock in a property now but expect liquidity later from a sale, inheritance, bonus, overseas transfer, or future mortgage.

The problem is that the final payment does not disappear. It is only delayed.

If the buyer cannot complete the payment later, the contract can become risky. Mortgage approval may change. Interest rates may remain high. The shekel may move against a foreign-currency buyer. The apartment’s market value may not rise as expected. The buyer may also face linkage costs if the unpaid balance is tied to the Construction Input Index.

The pressure is often inside the project, not the national headline

The Israeli new-build market is not one market. A Tel Aviv luxury tower, a Netanya seafront project, a Jerusalem family neighborhood, and a southern periphery project can behave very differently.

Still, the current market signals matter.

The Bank of Israel recently tied higher developer financing needs to slower new-home transactions, rising construction costs, record unsold new-home stock, and sales campaigns that sometimes included substantial payment deferral. (boi.org.il) Ynet also reported that credit to builders jumped while home sales slowed, unsold apartments hit record levels, and deferred-payment deals increased the exposure of banks and developers. (ynetnews.com)

For a buyer, the lesson is practical: do not ask only, “Is the market up or down?” Ask, “Is this specific project ahead or behind its sales target?”

That question is where negotiation starts.

When a deferred-payment deal may be genuine buyer leverage

A payment deferral can be a useful negotiation opening when several signals appear together:

1. Many similar units remain unsold
   If several apartments with the same size, floor range, or orientation remain available, the developer may be more flexible.
2. The building is physically advancing faster than sales
   This can create financing pressure, especially when the developer needs to show progress to lenders.
3. The offer keeps changing
   A project that moves from standard payments to 80/20, then to index protection or upgrades, may be testing demand.
4. Brokers are suddenly more active
   Increased broker incentives can indicate the developer wants sales without publicly lowering prices.
5. The developer prefers “benefits” over a price cut
   This often means they want to preserve the official price per square meter while improving the buyer’s actual economics.

When the same offer may be more risk than opportunity

Deferred payment is not always a bargain.

It can be risky if:

• You are relying on future mortgage approval that has not been tested.
• Your income is overseas and your currency exposure is unhedged.
• The unpaid balance is linked to an index that may rise.
• For a CPI or index-linked balance, demand either a no-indexation clause or a written cap, and confirm the linkage start date and the base index used.
• You plan to resell before delivery but the market is not liquid.
• You are buying in a project with many competing unsold units.
• Your contract penalties are severe if you cannot complete.
• The handover date is uncertain.
• The project’s legal rights, permits, or bank accompaniment are not fully clear.

A low upfront payment can make a large purchase feel smaller than it is. That is exactly why buyers need to underwrite the full obligation, not only the first payment.

How to negotiate without insulting the developer or weakening your position

A serious buyer should not start with “the market is weak, give me a discount.” Developers hear that all day.

A better approach is evidence-based:

• Before negotiating anything else, ask for the offer in writing with the exact unit ID, total price, and an expiry date, and have the sales rep point to the specific contract paragraph that confirms any discount, linkage relief, or bundle.
• “I can move quickly if the final economics are right.”
• “I want to compare this unit against similar unsold units in the project.”
• “I need the payment plan modeled with index exposure.”
• “If the price is fixed, where is there flexibility in structure?”
• “Can we discuss parking, storage, upgrades, legal costs, or index protection?”
• “What is the developer’s preferred signing timeline, and what value comes with that?”

The strongest buyer is not the loudest negotiator. It is the buyer who can show financing readiness, understand project pressure, and structure a clean offer.

Turning a developer’s payment plan into a smarter buying decision

Deferred-payment offers are not something to reject automatically. They can be useful, especially for buyers with strong future liquidity, mortgage readiness, or foreign-currency planning.

But they should be treated as negotiation evidence, not marketing gifts.

If a developer is willing to move on timing, they may also move on index protection, upgrades, parking, storage, legal costs, or even price. The key is to understand whether the project has real pressure and whether the revised structure improves your total economics.

If you would like help evaluating your options or have questions about your property search in Israel, reach out to the Semerenko Group team here for a personal, expert consultation.

The negotiation lessons to carry into your next project meeting

• A deferred-payment offer can be a signal of developer pressure, but it is not proof of a bargain.
• The real negotiation may be in structure, not only in the shekel price.
• Model the final payment before signing, especially if you need a mortgage or foreign-currency transfer.
• Before accepting developer or bridge financing, require a full terms sheet (nominal rate, APR, fees, grace period, penalties, repayment schedule) plus worked 20-year and 30-year payment examples that state their assumptions.
• Compare actual transactions and unsold project inventory, not only brochures and asking prices.
• Treat 80/20 or 90/10 terms as the start of due diligence, not the end of it.
• Confirm in writing whether a deposit is a refundable reservation or a non-refundable commitment, including the refund window and conditions, and pin down late-delivery compensation and any assignment rights (timing, cost, conditions) before paying.

Sources:

• Box from the forthcoming Survey of Israel’s Banking System for 2025: The development of credit in the construction and real estate industry | בנק ישראל – הבנק המרכזי של ישראל
• Israel’s housing market shows bubble warning signs as banks prop up developers
• The Supervisor of the Banks has published a standardized text for the guarantee document according to the Sale (Apartments) (Assurance of Investments of Persons Acquiring Apartments) Law, 5734-1974 | בנק ישראל – הבנק המרכזי של ישראל
• Over 80,000 new apartments remain unsold: Israel’s housing market continues to stall

Get every promise in writing before you sign

Once you have decided a deferred-payment deal is worth pursuing, the next step is to force every verbal promise onto paper. A discount, an indexation break, or an upgrade bundle only counts if it appears as a clause in the contract. Before transferring any money, ask the developer to confirm the following in writing:

• The exact unit number, full price, and the offer’s expiry date.
• Whether the unpaid balance is fixed or index-linked, and if linked, the start date, base index, and any written cap or no-indexation clause.
• For developer or bridge financing, a full terms sheet: nominal rate, APR, fees, grace period, penalties, and a repayment schedule, plus worked monthly examples over 20 and 30 years at current bank rates.
• Whether your deposit is refundable, and the exact refund window and conditions.
• A cash value for each “free” upgrade (parking, storage, appliances, air-conditioning, kitchen, smart-home), itemized line by line.
• Milestone payment dates, the handover date, and any late-delivery compensation clause.
• Whether you may assign the contract later, and at what cost and timing.
• Hidden costs such as legal fees, registration and planning (Taba) paperwork, betterment levy, connection fees, and management fees.

If a benefit cannot be pointed to in a specific contract paragraph, treat it as marketing, not as an agreed term.