Israeli Rents Surge, Especially in Outlying Cities, Exceeding 5,000 Shekels Monthly

Rental prices across all 18 of Israel's largest cities have increased in the first half of 2026 compared to the same period in 2025, with a notable surge in areas outside the Gush Dan metropolitan region. Beit Shemesh recorded the sharpest price hike, experiencing nearly a 10% increase. Nationally, the average rent surpassed 5,000 shekels for the first time, reaching 5,086 shekels per month, a 3.1% rise year-over-year. While Tel Aviv remains the most expensive city for rentals at 7,398 shekels monthly, its price increase of 2.8% is lower than that of cities like Beit Shemesh. The Central Bureau of Statistics data indicates that rent prices rose faster in the first quarter than in the second.

The cost of rent varies significantly by apartment size. Nationally, one- to two-room apartments averaged 3,758 shekels, while larger units of 4.5 rooms or more averaged 7,114 shekels. In Tel Aviv, even a one- to two-room apartment costs an average of 5,474 shekels, significantly higher than in other major cities like Herzliya (4,428 shekels) or Beersheba (2,301 shekels). For larger apartments, the price gap widens, with a 4.5+ room unit in Tel Aviv costing 11,272 shekels, compared to 4,866 shekels in Ashkelon.

Real estate experts attribute the rising rents to a stagnant housing market. Ovad Danos, a former chairman of the Israel Association of Real Estate Appraisers, explained that potential buyers are delaying purchases due to interest rates and financing uncertainties, while a decrease in investor deals limits the supply of rental properties. This imbalance is driving up rental costs, particularly in previously more affordable areas.

Danos criticized the government for focusing on housing prices while neglecting the rental market, arguing that this shifts the housing crisis burden onto renters, who are often economically vulnerable populations like young people, students, and new immigrants. Bernard Raskin, CEO of RE/MAX Israel, predicts further rent increases over the next two years due to declining construction rates and investor departures, leading to a greater shortage of rental units.

Raskin suggests that the government should encourage investment in rental properties rather than trying to push investors out. Sharon Tusia-Cohen, CEO of Rent It, views the long-term rental segment as a viable housing alternative, offering tenants stability and predictability in planning their lives.