Real estate giant Kardan Real Estate reports sales slowdown on the free market
Kardan Real Estate experienced a sharp decline in free-market apartment sales during the second quarter. While subsidized 'Target Price' projects sustained volume, the company warns of potential profit margin compression due to rising subcontractor costs and labor shortages.
What happened to the pace of apartment sales for Kardan Real Estate in the second quarter of the year? Data indicates a sharp slowdown in free-market sales, contrasted by continued activity in subsidized projects such as 'Target Price'.
In Holyland Jerusalem (complex I), 6 apartments were sold in the second quarter, compared to 2 in the first quarter and 8 for the entire year of 2025. In the second complex, only one apartment was sold, matching the first quarter's figures. In the Metzada project in Bat Yam, no apartments were sold in the first two quarters of the year, compared to 53 sales in 2025. The marketing rate currently stands at 26%.
Regarding the Karmi Gat project in Kiryat Gat, 14 apartments were sold in the first quarter, but only one contract was signed in the second. The average price stands at 17,439 NIS/sqm. Last year, 18 apartments were sold in total.
Within the framework of the 'Target Price' program, the company continues to sell units, primarily affordable apartments in Kiryat Gat. In the second quarter, 128 apartments were sold, compared to 85 in the first quarter. This is a large-scale project, and to date, only 8% of the units have been sold.
Against the backdrop of the war and market instability, the company acknowledges a slowdown in apartment purchases. The report states:
"Against the backdrop of the continued effects of the war, including a shortage of manpower, the cessation and slowing of work at sites, and a shortage of raw materials, there continued to be delays in planning and execution procedures. The difficulty for subcontractors to return to normal output levels (including point-specific work stoppages during Operation 'Lion's Roar') forced El-Har to pay surcharges to subcontractors and manpower corporations and/or replace them in certain cases."
El-Har, acquired by Kardan in 2017, serves as the group's executive arm. According to Kardan, "these factors delay project progress and the realization of the group's backlog, which may even cause a decrease in the profitability of certain projects in construction and residential development." The company emphasized that El-Har is showing a decrease in expected annual revenue compared to previous forecasts.
The ROVA 7 project in Tel Aviv is currently defined as a "land reserve," meaning it is not under active marketing. Regarding pricing: in Holyland, the company sells apartments at approximately 37,000 NIS/sqm (including VAT), consistent with past sales. In Bat Yam, prices stand at 31,000–32,000 NIS/sqm, and in Karmi Gat at approximately 19,500 NIS/sqm.
