Illustration: Is it time to buy an apartment? (Photo: ShutterStock)
An examination of Walla Real Estate reveals: Home prices are falling dramatically, alongside a sharp increase in the rental market. In addition, since the beginning of the year, the main declines have occurred in new home prices.
The meaning: On the one hand, young couples who are looking for a residential apartment have the opportunity to go to the market and look for one, when their bargaining power is greater, interest rates are sky-high, sellers are leveraged and are quick to sell. This is excellent news, as long as the entrance to the new apartment is relatively immediate, and they will not be required to continue living in rentals, since, as mentioned, rental prices have continued to rise since the beginning of the year.
Thus, rents in a 3-room apartment in Tel Aviv have already risen by about 13% since the beginning of the year. in Jerusalem, Petah Tikva and Kfar Saba by about 7.5% since the beginning of the year; in Haifa, Be'er Sheva and Ashdod by about 5.5%;
Change in average monthly rent (Photo: Walla!, data taken from Madeleine's website)
The investors' watchmaker? On the other hand, this is the ideal situation for investors, which is likely to bring them back to the market, as yields rise and profitability pays off.
Thus, the return on investment in the student city, Be'er Sheva, increased to 4.1%; in Ramla 4.2%; in Tel Aviv 2.8%; in Haifa 3.2%; Petah Tikva 3%; in Rishon LeZion 2.9%; in Eilat 3.5%; Overall, in the past six months, rental prices have risen by a national average of 5.56%, reflecting an annual rate of increase of over 10%.
In general, an examination of 2,500 demand ads of apartments offered for rent today, conducted recently by former head of the real estate appraiser's office, Ohad Danos, shows a trend of price increases in the rental market, with changes between different cities and within the cities themselves. Particularly prominent in the price increases are: Tel Aviv, Kfar Saba, Jerusalem, Petah Tikva and Ramle.
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Data from Madeleine show that the largest decline in home prices was in the southern city of Sderot – at a rate of 12.2%, with the average price per square meter today being NIS 11,5.
Next are the cities in the center of the country: Rosh HaAyin with a decline of 8.7%, (NIS 25,300 per square meter); Ramla with a decrease of 8.5% (NIS 18,200 per square meter); Ness Ziona with a decrease of 5.9% (NIS 33,600 per square meter); Givatayim with a decrease of 5.7% (NIS 43,100 per square meter); Herzliya with a decrease of 5% (NIS 35,800 per square meter); and Bnei Brak with a decline of 4.3% (NIS 33,200 per square meter);
Additional declines in the periphery were in the cities of Kiryat Gat, with a decline of 4.2%; Eilat down 4.1%; Ashkelon with a decline of 3.4%; Safed with a decline of 2.6%; and Nof HaGalil with a decline of 2.3%; In Haifa there was a slight decline of 2.2%.
Naturally, the decline in the prices of sales transactions, in parallel with the increase in rental prices, leads to an increase in the annual return for investors, as we can see in the following table:
Average yield for a 4-room apartment (Photo: Walla!, data taken from Madeleine's website)
Tal Koppel, CEO of Madeleine, also analyzes the prices of new apartments: "Madeleine's data, which are based on real data from the Tax Authority, show that most of the declines in the first two months of the year, compared to the last two months of 2022, occurred in the prices of new homes. It seems that although the entrepreneurs are making great efforts not to lower prices and offer various and strange promotions instead, in practice, when it comes to signing the deal, they do show flexibility in prices as well, and are willing to press them down."
- Real Estate
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- Real Estate