Rental Market Shows Decline in Periphery While Tel Aviv Prices Continue Rising

The Central Bureau of Statistics (CBS) reported a 6.6% increase in rental prices for tenants renewing leases in June. However, new data from fintech company WeCheck, obtained by "Mamon," reveals a more nuanced picture. According to WeCheck, average rent in Israel fell by 1.1% in June to 5,113 shekels, alongside an 11.9% surge in rental listings. This decline is mainly concentrated in peripheral areas, whereas central regions and high-demand neighborhoods continue to see rising rents.

The sharp increase in rental supply partly reflects a technical adjustment compared to June last year, which saw an unusual market low due to Operation Guardian of the Walls. In Tel Aviv, rents rose by 0.4% month-over-month and 2.2% year-over-year, with the average rent reaching 6,766 shekels. Larger apartments (4-5 rooms) in the city experienced a 1.5% monthly increase to 9,584 shekels, marking a 5.9% annual rise.

Nationally, rent decreases were mostly seen in smaller apartments (1-3 rooms), which dropped 1.3%, while larger units fell only 0.9%, likely due to seasonal family demand in summer. WeCheck CEO Rami Ronen emphasized the link between supply and rent prices, noting that the largest supply growth and price drops occurred in smaller apartments, while larger units saw more moderate changes. He cautioned that it is too early to declare a trend shift based on one month’s data.

Nahama Bogin, Chair of the Chamber of Real Estate Appraisers, warned that without a significant increase in rental housing in high-demand areas, price pressures will persist. Chaim Froimovitch, Chair of the government company Dira LeHashkir, highlighted Tel Aviv’s exceptionally high rental demand and disproportionate prices. He called for more supervised long-term rental projects, noting that about half of Tel Aviv households rent and currently struggle to find affordable housing. Long-term rentals are seen as a key solution to keep residents in the city.