Exclusive to the Real Estate Center: Following the ceasefire in the north and just before the VAT hike, Israelis rushed to sales offices. According to data from the BMBY system, December recorded the highest number of signed contracts in two years, with a nearly 60% increase in transaction volume compared to November.
By Dror Nir Castel, Nadlan Center
The ceasefire agreement in the north, the VAT increase, and year-end sales promotions by developers led to an increase of nearly 60% in the number of transactions for purchasing a new apartment compared to November, according to data from BMBY. This software system collects and analyzes sales data from hundreds of projects. According to the system’s data, which reached Nadlan Center, approximately 2,444 contracts were signed in December following leads generated through the system for construction companies. This is a record volume of contracts registered in the system over the past two years, with an increase of about 59% compared to November 2024.
BMBY provides CRM (customer relationship management) software for real estate companies, which is installed at thousands of sales points across Israel. The system collects and analyzes inquiries reaching sales offices, enabling real-time and daily measurements of demand and transaction levels for new apartments. The transactions recorded in the system do not encompass all market transactions but serve as a representative sample of market trends.
According to Mark Zeevi, founder and CEO of BMBY, “In October 2023, following the outbreak of the Iron Sword War, a sharp decline in transactions was recorded. However, two months later, we observed an upward trend in transactions, continuing through the first half of 2024. Developers’ financing campaigns contributed to the increase in transactions, with market expectations that apartment prices will continue to rise. In the third quarter, a slight decline in transactions was observed, mainly due to the holiday season and actions by the Bank of Israel to curb financing campaigns. However, December witnessed a surge in transactions to a new record.”
Zeevi added, “Conversations with sales VPs in major companies reveal that the main reason for the rise in transactions is the VAT hike beginning January 1, which prompted buyers already in the process to expedite signing. The ceasefire in late November, which brought calm to the northern region and renewed activity at sales offices, also had an impact. Additionally, many developers conducted year-end sales promotions, and transactions were accelerated due to concerns that financing offers, enabling purchases with particularly low equity, would become less common. However, looking at the demand graph (leads), we do not see the same increase rates as in contracts. Therefore, it is possible that December’s sales peak will not be surpassed in January or February.”
“The sales teams worked from seven in the morning until midnight”
Ohad Asraf, CEO and owner of Ari Migurim Real Estate Marketing Group confirmed the trend, noting that December saw an increase of tens of percent in transaction volumes, primarily due to an acceleration of deals ahead of the VAT hike. “Although the VAT increase does not significantly affect the transaction as buyers do not pay the full amount upon signing and future payments absorb the VAT hike, it was a catalyst for deals nearing completion, coupled with year-end promotions by developers, some of whom offered to absorb the VAT hike for the entire apartment.”
He added, “Most deals were finalized in the last days of the month—this created pressure at both sales offices and mortgage banks, which struggled with the workload. Our sales teams worked from seven in the morning until midnight, making December an extraordinary month. We even encountered cases where people registered on December 30 and signed the deal by December 31.”
Nir Shmol, CEO of Snir Real Estate Marketing Company, noted, “The last week of December resembled the transaction frenzy seen in the past when the purchase tax for investors rose from 5% to 8%, even though the VAT increase from 17% to 18% is less critical, as buyers today only pay a small amount upon purchasing an apartment.”
“Therefore, we can say that the phenomenon of the flood of transactions in December was mainly due to market expectations and the desire to finalize deals for apartments ready in three or four years, during which prices will likely continue to rise, mortgage interest rates will drop, and perhaps VAT will decrease. In practice, we stayed at sales offices until the early morning hours, with buyers rushing to banks with vouchers to complete payments before the year ended.”
