Saturday was quiet for the news because it was Shabbat. Sunday morning brought two fresh real estate stories, both from the paper TheMarker, and both worth a buyer’s attention.
First, a developer in Ramat Beit Shemesh is suing about 200 of its own buyers. The company wants a court to force changes off their homes, and for the buyers who won their apartments in a government price lottery, it is asking to cancel their contracts outright. The buyers say this is payback, because most of them had already sued the same company over late delivery.
Second, Bank Hapoalim, one of Israel’s two biggest banks, is putting its old Tel Aviv office complex up for sale. The site can be rebuilt into a tower of up to 45 floors, and up to 40 percent of it could be homes. That is one more office block that may turn into apartments.
The big-picture numbers from earlier this week, the rate cut to 3.5 percent and the pile of unsold new homes, are already covered on this site, so we skip them here. The next number to watch lands Wednesday, July 15, when the statistics bureau publishes its home price index. And by Monday noon the state must answer the High Court over who runs the Israel Land Authority (see the update note at the end).
A builder is suing about 200 of its own buyers
A company called Sha’arei Beit Shemesh has sued around 180 to 200 people who bought apartments and shops in a project it built in Ramat Beit Shemesh. The reports come from Globes on July 9 and TheMarker on July 12. About half of the flat owners are winners of “Mehir LaMishtaken,” a government program that sells new homes below market price to people picked in a lottery.
The project is large. It will hold 13 buildings and 312 apartments plus shops, and all the homes are already lived in. The company says the buyers made “building violations,” meaning changes without permission. The examples given are small: air-conditioner units hung on the outside walls and balconies closed in. The company claims these changes made the place look messy, “a slums neighborhood” in its own words, and lowered its value.
Here is the part that stings. The company asks the court to order the changes removed, and to make free-market buyers pay it 2 percent of what they paid for their home. For the price-lottery buyers, it goes further and asks the court to cancel their purchase contracts. Losing that contract would mean losing a home bought at a protected, below-market price.
Why would a builder turn on its own customers? The buyers have an answer. Most of the people now being sued had earlier taken the company to court over late delivery, meaning the homes were handed over long after the promised date. That earlier claim, brought by 127 residents for about 5 million shekels, ended in a settlement whose terms were kept secret. The buyers believe this new lawsuit is the company trying to claw back some of the money it paid out. One owner put it plainly: 126 of the people being sued are the same ones who sued before, and now they are targeted just for hanging an air conditioner.
A lawyer who represented some of the buyers in the first case called the alleged violations minor and made in good faith. He said he does not expect a court to cancel a sale contract over an air conditioner on an outside wall, and noted that some residents had even checked with the city first.
One more detail matters for context. The company is controlled by Israel Zeira, who also leads the religious group Rosh Yehudi, the organization known for the disputed public prayer at a Tel Aviv square on Yom Kippur in 2023.
Our figure: the suit names about 180 of the 312 apartments in the project. That is close to 3 in 5 homes, so the developer is fighting well over half of its own buyers at once. The number of price-lottery families who could, in the worst case, lose their contracts is the real risk here.
Why it matters: if you buy a new home in Israel, small changes you make can become a weapon in a fight with the developer. Before you hang an air conditioner or close a balcony, get written approval from the developer and the city, and keep it. If you buy through a price lottery, read the contract’s rules on changes with extra care, because your protected price is what is on the line. This is a lawsuit, not a ruling, so nothing is decided yet. For the wider rules on late delivery, see our note on how Israel courts treat delivery delays.
Sources: Globes, July 9; TheMarker, July 12. The “won the first case” claim is softened here: the earlier suit ended in a confidential settlement, not a public win.
Bank Hapoalim puts a Tel Aviv office block up for sale
Bank Hapoalim is selling its office complex on HaRakevet Street in south Tel Aviv, TheMarker reported on July 12. The complex sits on HaRakevet 28 to 30 and HaNegev 9 to 11. It covers 5.4 dunam (about 5,400 square meters, or 1.3 acres), was built in 1998, and holds three 11-story buildings with about 22,000 square meters of offices above a large underground car park.
The bank is selling because it is moving. In 2021 it bought a whole 40-story tower nearby, at HaHarash 18 next to the La Guardia interchange, and branded it “Poalim Center.” That purchase is well documented: the bank paid about 970 million shekels for roughly 60,000 square meters, and planned to bring its head-office staff, about 4,000 people, under one roof by the end of 2025. With the move now happening, the old HaRakevet site is no longer needed.
The interesting part for housing is what can replace it. TheMarker reports that the site carries building rights for a tower of up to 45 floors, and that up to 40 percent of it could be homes. Israel’s office market is weak right now, with too much empty space, so turning part of a prime plot into apartments is what could draw buyers. Note this one specific: the sale and the plot’s exact building rights come from a single outlet so far, so treat the 45 floors and 40 percent figures as reported, not yet confirmed by a second source.
Two figures we worked out from the verified numbers. First, the new HQ tower cost about 16,000 shekels per built square meter (970 million divided by 60,000 square meters), a useful yardstick for prime Tel Aviv office space. Second, the old HaRakevet site is dense already: its 22,000 square meters of offices sit on 5,400 square meters of land, about 4 square meters of building for every 1 square meter of ground. A 45-floor rebuild would stack far more on the same plot, which is why the land is worth marketing even in a soft office market.
Why it matters: this is a business-to-business sale, not a home you can buy. But it points to a trend that touches renters and buyers. As banks and firms shed older offices, some of those plots get rezoned for housing. Watch south Tel Aviv near the train and the La Guardia interchange, because more homes there could arrive over the next few years.
Source: TheMarker, July 12. The 2021 HQ purchase is confirmed by Globes and others.
One number from the week’s reported sales
This is not a market call, just a single computed figure from two real deals reported this weekend, to show how far apart prices sit across the country. In Tel Aviv’s Bavli area, a 3-room apartment sold for about 69,000 shekels per square meter (Bizportal, July 11). In Migdal HaEmek in the north, a 130 square meter, 5-room apartment sold for 1.8 million shekels, which works out to about 13,850 shekels per square meter (Globes, July 11).
Our figure: a square meter in that Tel Aviv deal cost about 5 times a square meter in that Migdal HaEmek deal (69,000 divided by 13,850). Same country, same week, and the same 130 square meter home would cost roughly 9 million shekels in Bavli versus 1.8 million up north. If you are open on location, the north still buys far more space for the money.
What we checked and set aside
- Bat Yam as the cheaper Tel Aviv (Ynet, July 11): a feature arguing a 3 million shekel budget buys a 2 to 3 bedroom near the beach in Bat Yam, versus a 1 bedroom in Tel Aviv proper. Useful, but it is the “look at nearby cities” idea we already cover in our piece on how buyers rethink prestige for practical neighborhoods. No new event.
- Human-interest rentals (Ynet, July 12): a profile of a Tel Aviv couple paying 9,200 shekels a month for a 3-room flat over the Jaffa market. A story, not news.
- Beersheba old city and a mamad price check (TheMarker and ICE, July 11): soft features, no decision or data behind them.
- Tax explainer pages (Bizportal): evergreen question-and-answer posts on purchase-tax breaks and the surtax. Republished, not fresh news.
- Recycled figures: the median home price near 2.15 million shekels, the roughly 83,000 to 84,000 unsold new homes, and June sales at a 20-year low all resurfaced this weekend but come from June and early July, not the last 24 hours.
- Stock market filings: Sunday’s company filings on the exchange were routine holding changes (Airport City, Ari Real Estate, Isras, Luzon). Nothing new for property.
Dates to watch
- Monday, July 13, noon: the state must tell the High Court whether it accepts the court’s plan for who runs the Israel Land Authority (see the update note below).
- Wednesday, July 15, 18:30: the Central Bureau of Statistics releases its home price index, covering roughly April and May deals. This is the most important number of the week.
- Early September: the Bank of Israel’s next interest-rate decision. There is no rate meeting before then.
Update for an existing post (no new page needed)
- israel-moves-to-void-its-new-land-authority-chief: add that the state faces a hard deadline of Monday, July 13, at noon to accept or reject the High Court’s compromise. The court’s plan would annul Yehuda Eliyahu’s permanent appointment and the search committee’s recommendation, replace two committee members over conflict of interest, re-interview Eliyahu and two other candidates, and end Eliyahu’s term as director on July 19. The attorney general has also opposed keeping Eliyahu on as acting director. Sources: TheMarker and Calcalist, July 9 to 10.
Sources
Globes on the Beit Shemesh contract-cancellation suit (July 9)
TheMarker on the Beit Shemesh “revenge” countersuit (July 12)
TheMarker on Bank Hapoalim selling the HaRakevet complex (July 12)
Globes on Bank Hapoalim’s 2021 purchase of its new headquarters tower
