Sunday was a working day in Israel, so the wires were busy. The clearest theme was money and trust. A bank that finances a luxury Tel Aviv tower looked at the builder’s sales, worth 549 million shekels on paper, and refused to count 381 million of them, because buyers could still walk away or had put down too little. The same day, the Bank of Israel signaled it wants banks to slow the flood of loans they hand builders. Loans for home projects jumped about 40 percent last year, from roughly 49 billion to 69 billion shekels, even though builders sold about a quarter fewer homes.
The courts were loud too. The Supreme Court froze the sale of 108 building plots set aside for reservists and disabled veterans in two central villages, saying the land dispute must be settled first. And a decade-long fight over a Rishon LeZion mall ended when the Gindi brothers dropped an 800 million shekel claim against Migdal. Add three planning moves in Ramat Gan, Lod, and Gedera, plus a lawyer’s warning about builders going under, and the message for a buyer is simple: this year, who you buy from matters as much as what you buy.
A bank counted a Tel Aviv tower’s sales, then threw most of them out
Here is the story that best explains today’s market. The Hagag brothers are building a luxury tower called “Bavli 3” in north Tel Aviv, up since January 2024. Their financing bank (the bank that funds the building and holds buyers’ deposits in a locked project account) set a rule: to open the full loan line, up to 388 million shekels, Hagag had to show at least 434 million shekels of sales, before VAT, by July 19.
On paper, Hagag sailed past it, signing contracts worth 549 million shekels. Then the bank looked closer. It found that 381 million shekels of those contracts let the buyer cancel, or came from buyers who put down less than 15 percent. The bank refused to count them. Our math: that is about 69 percent of the signed “sales” that the bank would not accept as real (basis: 381 divided by 549; our derivation from the reported figures). Nearly seven of every ten shekels of “sales” did not hold up.
To avoid pulling the plug days before the deadline, the two sides cut a new deal, reported by ice, Calcalist, Globes, and Bizportal. The deadline moves to December 31, 2026, but the bar goes up: Hagag must now show 483 million shekels of “clean” sales, meaning no cancellation option and at least 15 percent down. Only 332 million shekels qualify today. Our math: that leaves about 151 million shekels of clean sales to sign in roughly five and a half months, close to 28 million shekels a month (basis: 483 minus 332, spread over July 19 to December 31; our derivation). The bank raised the immediate credit to 300 million shekels, and Hagag put in more of its own money, lifting its equity to 211 million.
The part that touches buyers most: until Hagag hits the target, the buyers’ money sits frozen in the project account and cannot pay for building without the bank’s clear say-so. If Hagag misses by year end, the bank can cancel the loan and demand its money back at once.
Why it matters: a headline sales number can hide soft contracts. If you are buying a new home, ask how many of the project’s “sales” are firm, and confirm your deposit sits in a proper project escrow account, money held in a locked account until the deal is safe.
The regulator wants banks to ease off the builders
Hagag is not alone, and the Bank of Israel has noticed. Banks lent far more to home builders last year even as sales sank. Loans for residential project financing rose from about 49 billion shekels at the end of 2024 to about 69 billion at the end of 2025, a jump of roughly 40 percent, per data cited by Merkaz HaNadlan and Calcalist. Our figure: that is about 20 billion shekels of extra lending in the same year builders sold about 25 percent fewer homes (basis: the 49 to 69 billion rise against the reported 2025 sales drop; our derivation). Lending went up while selling went down.
The Bank of Israel’s own May review of the banking system shows the strain. The share of big-bank exposure to projects where building ran ahead of sales rose from 35 percent to 44 percent in one year. Average “absorption capacity,” which is how far a project’s prices could fall before the bank starts losing money, dropped from 70 percent to 58 percent. The bank stresses that cushion is still fairly wide on average. To cool things down, the Supervisor of Banks circulated a draft telling banks not to base a senior manager’s bonus mostly on one line of business, such as building loans. The likely result: banks check each project harder and lend a bit less freely.
Why it matters: tighter building loans can stall weaker projects and push builders to keep offering payment tricks instead of true price cuts. For the background on those incentive deals, see our report on why developers are offering incentives now.
The court froze 108 plots promised to reservists
The Supreme Court dealt the Israel Land Authority a setback. Justice Gila Knafi-Steinitz reversed a lower court and froze the marketing of 108 home plots in two sought-after central villages: 64 in Mishmar Ayalon, in the Judean lowland, and 44 in Ganot, near the Highway 1 and Highway 4 junction. The plots are expansion lots tied to reservists and disabled veterans. The ruling is reported by Merkaz HaNadlan, Calcalist, and Bizportal, and the full decision is posted here (PDF).
The backstory: in April 2025 the Land Authority moved to market the plots without the farming cooperatives’ consent, under old plans approved in the 1990s that were never built. In May 2025 it told the cooperatives to hand the land back within 60 days. The cooperatives lost at the district court, then won at the Supreme Court. The judge ruled that selling now would “change the existing situation in a way that may prove irreversible,” so the status quo holds until the ownership claims are decided. The Land Authority must pay 5,000 shekels in costs to each cooperative, 10,000 in total, and may only take steps that do not change the land’s status.
Why it matters: land set aside for reservists can still be stuck in court for years. If you are eyeing a village expansion lot, check whether the underlying land rights are settled before you count on a tender.
A ten-year mall fight in Rishon LeZion is over
One long saga closed quietly. The Gindi brothers, Moshe and Yigal, had sued the insurer Migdal for 800 million shekels over a blocked basement food market at the Gold Mall (Kanyon HaZahav) in Rishon LeZion. A district court threw the claim out. On Sunday the Gindis dropped their Supreme Court appeal, so that dismissal stands, ending close to a decade of fighting, per Calcalist, Globes, and Merkaz HaNadlan.
The timing is telling. The retreat came just weeks after Migdal moved to buy out the brothers’ remaining stake and become the mall’s sole owner, in a deal reported at about 840 million shekels. We flagged this case yesterday as unconfirmed and said we would recheck it. Three outlets now carry it, so it is confirmed.
Why it matters: big insurers keep buying control of Israeli shopping centers. For shoppers and small tenants, single ownership can mean faster decisions but less bargaining room on rent.
Three planning moves worth a minute
Sunday brought a batch of local planning news. Each is small on its own, but together they show where density is heading.
| Where | What was decided | Homes |
|---|---|---|
| Ramat Gan (Bialik St.) | The district committee takes up a Marathon Fund plan for a 38-floor mixed-use tower next to city hall. Three buildings come down; a historic yeshiva building is kept. Reported by Merkaz HaNadlan. | About 206 new homes |
| Lod (Hisachon Gimel) | A new partnership, Netivim, won the residents’ vote to rebuild the old “HaMelachim” railway blocks. Six old buildings fall; three towers rise. Reported by Merkaz HaNadlan. | 96 old flats become 528 |
| Gedera (south) | A court told planners to reconsider adding 30 dunam, once blocked for security reasons, to a business park. A dunam is 1,000 square meters. Reported by Merkaz HaNadlan. | Jobs, not homes |
Our math: the Lod deal turns 96 old apartments into 528 new ones, about 5.5 times the homes on the same ground (basis: 528 divided by 96; our derivation). That density jump is what makes these old railway plots worth a developer’s while. Why it matters: if you own in an aging block near transit, a rebuild offer may be closer than you think. For where these deals still favor owners, see our guide to urban renewal corridors.
A warning about who you buy from
One story is a caution, not a confirmed count, so we label it clearly. Attorney Ilan Leibovich, a former member of Knesset, told Maariv that about 800 building contractors collapsed in 2025. We could not confirm that exact number at an official insolvency source, so treat it as his estimate, not a hard figure.
The numbers he cites around it are firmer. Fewer than 85,000 homes sold in Israel in 2025, a low not seen in two decades, and about 22 percent of those sales were in urban renewal projects, which lines up with the Bank of Israel noting sales fell about a quarter last year. That ties tens of thousands of households to a builder finishing the job. In pinui-binui deals (where owners hand over old flats, a developer knocks the building down and rebuilds, and each owner gets a new, larger flat), the risk is sharper: some families have already moved out, or watched their old home come down, before the new one exists. If a project stalls, buyers can be asked for extra money, and rent guarantees meant to cover temporary housing may run dry.
Why it matters: before you sign, look past price per meter, finish, and delivery date. Check the executing contractor’s financial strength, and read the rent guarantee’s time limit.
Also on the Knesset’s last working night
The Knesset passed two land-related laws on July 19, its final stretch before dissolving for the October 27 election, confirmed in the Knesset’s own legislation record. First, it extended the Vatmal housing fast track by one year, so this planning body can keep handling preferred plans submitted through August 8, 2027, and it removed ministers’ power to extend the law again by simple order. We reported the passage yesterday from press accounts; the official record now confirms it. Second, it changed the Land Authority law to let small peripheral towns receive state land without a tender to build renewable-energy projects, and to keep 80 percent of the profit when they partner with a neighboring town.
Already covered: one line each to update
- Housing pipeline. Update for our pipeline post: the Vatmal fast-track extension is now confirmed in the Knesset’s own record, passed on third reading July 19, with plans accepted through August 8, 2027.
- Contaminated ground. Update for our toxic soil post: a fresh Bizportal piece shows the problem reaches well beyond Sde Dov, with polluted old industrial land delaying thousands of planned homes.
- The split market. Update for our prices post: ice maps the cities where sellers are stuck, as new-build prices tick up while second-hand prices slip.
What we checked and set aside
- The “800 contractors” as fact. We kept the warning above but not the number as a hard statistic, since no official insolvency source confirmed it in time.
- An S&P forecast of a 4.1 percent price drop in 2026. Real, but about three days old and recirculating, not fresh 24-hour news.
- Two “big plan” items that were a week old. A 20,000-home plan to double the desert city of Arad, and a state appeal over Highway 4 land payouts, both dated July 13. Date traps, dropped.
- A Hod Hasharon growth profile with no new committee decision or date attached. Market color, not news.
- A Mizrahi-Tefahot offer to refund some mortgage customers up to 3,000 shekels for July. Reads as a bank promotion; set aside pending proof it is more than marketing.
- Also set aside: a Maariv “the market is emptying” hook that leans on old data, a rent versus buy opinion piece, a “don’t open the champagne” analysis, a single-source YouTube video alleging building sabotage, a construction-crime item with one source, a politically charged land-rights case outside consumer housing, road-budget and solar-land items, weekly deal columns, and a moody TheMarker feature on a long-abandoned commercial shell in Givat Shmuel that carried no hard news beat.
Dates to watch
| Date | What happens |
|---|---|
| July 20 (today) | Two Israel Land Authority tenders closed: Ariel (39 homes) and Migdal (8 lots). The Bnei Brak “Bird Compound” tender (947 homes) still has no booklet posted; bids there are due October 5 |
| July 22 | Vatmal hearing on the Carmei Gat East plan (about 11,000 homes), per earlier reporting |
| August 31 | Bank of Israel interest rate decision (rate now 3.5 percent) |
| October 12 | Israel Land Authority tender for 120 assisted-living units in Be’er Sheva closes (corrected from an earlier July date) |
| October 27 | Knesset elections |
| December 31 | Hagag’s deadline to show 483 million shekels of “clean” sales at Bavli 3, or risk losing its bank financing |
Sources
- Bavli 3 financing: ice, Calcalist, Globes, Bizportal
- Bank of Israel financing: Merkaz HaNadlan, Calcalist
- 108 plots frozen: Merkaz HaNadlan, Calcalist, Bizportal, Supreme Court decision (PDF)
- Gold Mall: Calcalist, Globes, Merkaz HaNadlan
- Planning moves: Ramat Gan (Merkaz HaNadlan), Lod (Merkaz HaNadlan), Gedera (Merkaz HaNadlan)
- Contractor warning: Maariv
- Knesset laws: Knesset legislation record, Ynet
- Updates: Bizportal (contaminated land), ice (stuck sellers)
