Israeli Rents Rise 3.4% Annually Amidst Market Shifts
Translated & summarized from Israel Hayom by baba
Average monthly rent in Israel rose by 3.4% year-over-year to 5,067 shekels in September, according to WeCheck data. Larger apartments saw a 3.8% annual increase, while the supply of rental units dropped 26.5% from August. Ashdod experienced the largest annual rent hike at 8%. Experts cite high interest rates, investor taxes, and geopolitical uncertainty as key drivers, warning that prices will continue to rise without increased investment and supply.
The story in 5 lines · by baba
- Average Israeli rent increased 3.4% year-over-year to 5,067 shekels in September.
- The supply of rental apartments fell 26.5% from August to 11,889 units.
- Ashdod saw the highest annual rent increase at approximately 8%.
- High interest rates and investor taxes are contributing to rising rents.
- Experts predict continued rent increases without more investment and supply.
Rental prices in Israel continue to climb, with average monthly rent reaching 5,067 shekels in September, according to data from WeCheck. This represents a 3.4% increase compared to September of the previous year and a 0.1% rise from August. Larger apartments, those with four to five rooms, saw a 3.8% annual rent increase, while smaller apartments with one to three rooms experienced a 3% rise.
Following the summer months, the supply of rental apartments decreased by 26.5% from August to 11,889 units. However, this is a seasonal dip, and the overall supply remains 2.7% higher than in September of last year. Ashdod recorded the highest annual rent increase among the surveyed cities at approximately 8%, with an average rent of 4,672 shekels. Jerusalem saw a 5.9% increase to 5,743 shekels, and Rishon LeZion experienced a 4.2% rise to 5,290 shekels. Tel Aviv's average rent is 6,770 shekels, up 1.4% annually but down 2% from August. Haifa's average rent is 3,681 shekels, a 2.2% annual increase, and Beersheba's is 3,192 shekels, up 0.4%.
Rami Ronen, CEO and Founder of WeCheck, attributes the rent increases to factors including high interest rates, investor taxation, and geopolitical uncertainty. He explained that high interest rates make investing in rental properties less viable due to low yields, typically between 2.5% and 3%, which are difficult to justify with current interest rates. Ronen also stated that the government's increase in purchase tax for investors, intended to cool the real estate market, has paradoxically led to higher rental prices.
Ronen noted a decline in the supply of rental apartments since late 2022, coupled with rising demand. He warned that without government intervention to encourage investment and increase the supply of rental properties, prices are expected to continue their upward trend.
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