The figure the Treasury isn't telling you about the "wave of cancellations" in real estate deals
The Ministry of Finance reports a wave of real estate deal cancellations, but forgot to mention an important fact: in some cases, most of the cancelled deals have already "rolled over" and the apartments were sold to other customers. Kata Group, which had 7 deals cancelled in the quarter, has already sold 5 of those apartments - and at higher prices. Are the figures not dramatic?
The real estate company Kata Group cancelled 7 apartment sale deals totaling approximately 37.6 million shekels. Apparently, this seems to be part of the wave of deal cancellations that the Ministry of Finance spoke about. The reason for the cancellations was likely the buyers' inability to purchase the apartment. However, when diving into those numbers, it turns out that the company sold 5 of those apartments at a higher price. This happened recently in a project by the Hagag brothers, who managed to sell the apartments their clients cancelled to another customer. This is also happening in other projects across the country.
These data from Kata prove that despite the wave of cancellations, a significant portion of those apartments are already rolling forward. Are these deals with financing benefits? Likely yes. Will the next buyers follow through on the deal? There is no way to know. And yet, it is important to note: against the backdrop of the Treasury's report on a wave of deal cancellations, there are companies that are selling apartments very quickly.
Pay attention to the data: Kata Group sold the apartments in the cancelled deals at an average price of about 5.37 million shekels, and sold them again at an average price of close to 7 million shekels. We do not know which apartments it sold, and it is possible that some of them are penthouses and the unsold ones are 2-room apartments. It is too early to say that the price has skyrocketed, but it seems it certainly has not gone down.
Despite the slowdown in Tel Aviv, according to Kata's reports, one can see that the increase in the volume of apartment sales stems from the start of marketing for its project on Weizmann Street in Holon, where it signed 41 new contracts in presale. One can see the increase in apartment sales in semi-annual terms: 120 apartments compared to 81 in the first half of 2025 - an increase of about 50%. In the second quarter of the year, it sold almost 4 times more compared to last year, and this despite the month of June, during which there was a war. Moreover, the company brought in about 100 million shekels more from apartment sales - 320 million shekels in half a year, compared to about 225 million shekels last year.
It is interesting to see what Kata Group did to sell the apartments. The second-quarter report explains the reason for the jump: it offers a payment of 10%-20% at the time of the contract, another 41% in the second payment, and 39% in the final payment (in the case of a 20% payment of the apartment's value in the contract), close to delivery. Why does it do this? To overcome the restrictions of the Supervisor of Banks. A payment of 40% at delivery is considered a contractor loan deal - and less than that - is not.
In addition, the company granted a benefit of exemption from index linkage in all contracts. We took the second-quarter data to understand how far it goes with contractor promotions: out of 120 apartments sold, totaling about 320 million shekels, 89 apartments were sold with financing benefits - without index linkage. Only 31 apartments were sold on a linear track.
This phenomenon is not found only in the Hagag brothers' company or Kata Group. In the company Israel Canada, agreements totaling 22.7 million shekels were also cancelled in the first quarter, but as far as is known, most of these apartments have already been sold. This is also happening in other companies we checked. From a conversation with a developer building in Tel Aviv, it emerges that most of the cancelled apartments have already been sold to a third party, with the bank already having performed underwriting, and according to him - the chance of another cancellation is very low.
At Kata Group, they noted that the deal cancellations were not mentioned in the report - meaning, if you thought that a cancelled deal continues to be reported - that is a mistake. Real estate companies do not include these deals in the report, and in a large part of the times, they are not included in the subsequent report either. Real estate companies report sales according to the pace of construction, and therefore, it is possible that some of the Treasury data you saw are inaccurate because they do not include the apartments sold after the cancellation.
And finally, this is what the company Perskovsky wrote this week in its report: "In the company's assessment, in view of the initial examination, both in view of the imposition of a significant fine for cancelling a deal that applies to the buyer and in light of the company's accumulated experience, the chance that a buyer will not complete the deal is very low to negligible and non-existent." In total, the company had 3 deals cancelled from the beginning of the year to date, but it did not state whether it sold those same apartments, which are worth 4-4.5 million shekels.
