Check: How much is the discount worth on apartments sold by the Hagag brothers

The Hagag brothers have recently joined the trend that has been dominating the real estate market for the past two years: developer promotions. The company promises you can move into an apartment with an advance payment of only one million shekels, while for the two years you rent out the property, you will receive a return of 24%–52%. This return is calculated based on the advance payment, not the total value of the apartment. We examined whether Hagag keeps its promise, what the actual rental value is in the project area, and, more importantly, what the long-term return for investors will be.

Let's start with the first question: does Hagag, which promises a 52% return on capital, keep its word? The answer is yes. Why? Because Hagag does not base this on a rent estimate; it guarantees the money even if the apartment is not rented out.

Before diving into the numbers, let's recall how it works: Hagag is enticing buyers for the Infinity tower in Tel Aviv. They allow you to pay one million shekels and move in without a mortgage, with the balance due in about three years. If you decide to invest, they guarantee a minimum rent that could increase if tenants pay more (though we estimate they won't). It is safe to assume that Hagag is indifferent between whether you invest in the apartment or live in it, as they must finance your interest payments for the next three years.

Assuming you decide to rent out the property, you receive a benefit ranging from 240,000 to 528,000 shekels. We analyzed a 4-room apartment in the project, where the average rent is 18,000 shekels.

We examined reports and recent contracts to answer the more important question: what happens next, and what will the return be for investors compared to the total price? Will it be lower than average due to the high price, or higher than average due to the high rent in the area offsetting the cost?

Since the project began, the average price was about 55,000 shekels per sq. m, but in 2024, it was about 58,000 shekels per sq. m. According to first-quarter 2025 reports, the average price is slightly over 67,337 shekels per sq. m. We verified that this accurately reflects 2025 prices for 4-room apartments. Thus, assuming an investor paid 6.7 million shekels for such an apartment and received 18,000 shekels per month, the return is 3.22%—which is above the Tel Aviv average.

We calculated the discount received by a buyer of an average 4-room apartment in the project. The discount is not reflected in the price, but in the rent refund. Looking at the total, you get a 6.4% discount. For luxury apartments, this is an excellent deal for the company. While the discount percentage is above average, one must remember that in shekels, their profit remains high because these are luxury units. This also brings liquid capital to the company and signals optimism to the bank for the future.

Additionally, one must remember: such a deal is not just an indicator of a price reduction. It is beneficial for the company, which continues to report high sales figures, but less so for the Central Bureau of Statistics data, which does not include financing benefits in its calculations, keeping the official price high.