Jerusalem Rents Jump 9%, Tel Aviv Remains Most Expensive City

Rental prices in Jerusalem have surged by 9.1% over the past year, according to October rental data. Despite this significant increase, Tel Aviv-Yafo continues to hold the title of the most expensive city for rentals, with an average monthly rent of approximately 6,960 shekels. The national average rent across Israel stands at 5,062 shekels per month, marking a 3.4% increase compared to October of the previous year, indicating that renters are consistently paying more. Data from WeCheck's October report shows a slight moderation in the pace of rent increases, alongside a recovery in the supply of available apartments after a dip in September due to the High Holidays. The average rent saw a minor decrease of 0.1% from September but remains 3.4% higher year-over-year, continuing the trend of rising rental costs. Rents for smaller apartments (1-3 rooms) rose by 3.1% annually, while larger apartments (4-5 rooms) saw a 3.7% increase. Ashdod also experienced a notable annual rent increase of 4.5%, whereas Herzliya saw a 4.7% decrease in average rents.

In terms of supply, October witnessed a recovery after the holiday period, with the number of apartments listed for rent nationwide increasing by 6% from September to 12,603 units. The supply of 1-3 room apartments grew by 5.1%, and the supply of 4-5 room apartments increased by 7.6%. However, this monthly increase is partly influenced by the timing of the holidays. Compared to October of the previous year, the apartment supply is up by 8.8%, but this comparison is affected by the High Holidays falling in October last year. When comparing to November of the previous year, the first post-holiday month, the supply increase is only 1.2%. Significant variations in supply were also observed at the city level, with Rishon LeZion showing a 29.5% increase in listed apartments from September, followed by Holon (15.6%), Jerusalem (14.3%), and Netanya (8.2%). Conversely, Herzliya saw a 19.5% decrease, Beersheba 13.4%, Ramat Gan 7.7%, and Tel Aviv-Yafo 7.3%.

Rami Ronen, CEO and Founder of WeCheck, commented that while monthly rent changes were minimal, the annual picture shows a clear 3.4% increase compared to last October. He emphasized that despite some moderation in recent months, renters are still paying more than a year ago. Ronen also noted that the recovery in supply in October, when compared to the same period last year, shows only a marginal increase in available rental units. He stated that there are currently insufficient rental apartments in Israel to exert significant downward pressure on prices. To improve the situation, Ronen suggested increasing the actual supply, potentially by making investments more attractive and by directing some of the large inventory of unsold new apartments from contractors towards the rental market, even for a limited time. He concluded that without a genuine and sustained increase in supply, a broad decrease in rental prices is unlikely.