Israeli Rents Dip Slightly in August but Remain Higher Year-Over-Year

Average rental prices across Israel saw a slight decrease of 0.8% in August compared to July, according to data from fintech company WeCheck. Despite this monthly dip, rents remain 3.7% higher than in August of the previous year. WeCheck's figures differ from those of the Central Bureau of Statistics, which indicated continued rent increases in August.

The average rent in August was 5,063 shekels, down from 5,104 shekels in July. The total number of apartments available for rent remained stable, with a marginal increase of 0.7% to 16,172 units. However, the composition of available rentals shifted significantly, with a notable rise in larger apartments (4-5 rooms) and a decrease in smaller ones (1-3 rooms).

Supply of 4-5 room apartments increased by 15.2% month-over-month, while 1-3 room apartments decreased by 6.3%. Year-over-year, total rental supply grew by 6.2%. The price trends also diverged: smaller apartments saw a slight monthly rent increase of 0.2% to 4,328 shekels, while larger apartments experienced a 2.1% decrease to 6,451 shekels.

Jerusalem recorded the highest year-over-year rent increase at 7.4%, followed by Tel Aviv-Jaffa at 3.6% and Ashdod at 0.7%. WeCheck CEO Rami Ronen noted that while the overall supply is stable, the shift in apartment mix is significant, and the monthly price decrease doesn't yet signal a trend change given the annual increase.

Experts suggest the rent moderation might be due to fewer new transactions, with some tenants opting to renew existing leases rather than face current market prices. In larger apartments, the demand for units with protected rooms (Mamad) is a factor, with older units lacking them struggling to rent and forcing price reductions.