Israel's Rental Market Sees Shift: More Large Homes Available, Fewer Small Ones

The Israeli rental market in August experienced a notable shift in supply, with a significant increase in larger apartments (4-5 rooms) and a decrease in smaller ones (1-3 rooms). Overall apartment supply remained relatively stable, hovering around 16,000 units, a slight increase of 0.7% from July. However, within this total, the supply of large apartments surged by 15.2%, rising from 5,174 in July to 5,963 in August. Conversely, the availability of small apartments dropped by 6.3%, from 10,893 to 10,209 units.

Despite the overall stability in supply, rental prices saw a slight decrease of 0.8% in August compared to July, with the average rent falling to 5,063 shekels from 5,104 shekels. This overall dip was driven by a 2.1% decrease in the average rent for larger apartments, which settled at 6,451 shekels. In contrast, the average rent for smaller apartments saw a marginal increase of 0.2%, reaching 4,328 shekels.

Compared to August of the previous year, the total rental supply has increased by 6.2%. Both small and large apartment supplies are also higher year-over-year, by 6.1% and 6.3% respectively. However, specific cities like Ashdod, Ashkelon, Herzliya, and Tel Aviv have seen a reduction in available rental units, which could potentially lead to price increases in those areas. Jerusalem and Ramat Gan, on the other hand, experienced substantial increases in supply, possibly due to new rental housing projects.

Rami Ronen, CEO of WeCheck, commented that August's rental market presents an "interesting picture." He highlighted the stable overall supply alongside the significant internal shift, emphasizing that "the supply of apartments is not a single number story, but a mix." For renters, this means greater availability in the larger apartment segment, while options for smaller units have diminished.