Rents soared in 2023: Which city saw the biggest increase?/ShutterStock
The report of the Central Bureau of Statistics published last weekend presents bad news for young couples who dream of buying an apartment for living and meanwhile live in rent: while apartment prices rose again towards the end of 2023, after 10 consecutive months of a downward trend, rental prices in Israel also jumped in 2023, when an increase of 6% was recorded on average.
According to the CBS, the average rent in Israel as of the end of 2023 is about NIS 4,477 per month, compared to NIS 4,222 in the same period last year.
The rent for large apartments, between 4.5 and 6 rooms, increased at the highest rate of 6.6%, while the small apartments, 1-2 rooms, became more expensive at a rate of 5.2%.
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In terms of geographic location, a price increase was recorded in all the cities tested - with Kfar Saba recording the highest rate of increase - 8.1%.
The average rent in the city is NIS 5,200 per month compared to NIS 4,813 last year.
The highest average rent, as usual, was recorded in Tel Aviv - with an average of NIS 6,697 per month, an increase of 7.1% compared to last year;
It is followed by Ramat Gan with an average rent of 5,234 and an increase of 6% compared to 2022.
The lowest average rent was recorded in the southern city of Beer Sheva, which stands at NIS 2,857 per month, after a 3.9% increase compared to last year.
Beer Sheva is also the city where the lowest increase rate was recorded compared to the other cities in the test.
Other cities where you can rent an apartment for an average rent of less than NIS 4,000 are: Haifa, with an average rent of about NIS 3,021;
Ashkelon, with an average rent of NIS 3,328;
Bat Yam with NIS 3,937;
Bnei Brak with NIS 3,966 and Ashdod with NIS 3,969.
"It is clear that a decrease in rental prices is not expected"
Ohad Asraf, CEO and owner of Ari Magorim, which we used to analyze the CBS data, points out that "the increase in rental prices over the past year is evidence of the high level of demand for apartments in Israel. The rent increased and affected the prices as well. In addition to the natural demand for rental housing from students, young couples and housing developers (who rent an apartment and rent out their apartment) there is also demand from the return tenants who move apartments in TAMA 38 and Pinoy Binui projects, who live in rent for periods of 3- 4 years during construction.
In the last quarter of the year, tens of thousands of evacuees from the north and south of the country who rent apartments for long periods without knowing when they will be able to return to their homes also joined the market.
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Ohad Asraf, CEO and owner of Ari Magorim/Raz Rogovski
"Confronted with the growing demand for rental apartments, we also recall that a significant portion of the owners of the apartments who purchased them for investment are still paying their mortgage on the apartment, and in light of the increase in their monthly mortgage repayments, they had to raise the rent. Looking to the future, it is clear that a decrease in rental prices is not expected. The war period created a significant slowdown At the rate of construction of new apartments due to the lack of workers, this will be reflected both in the decrease in construction starts and in the postponement of the occupancy of the apartments that have already been bought, which will cause additional pressure in the rental market. In addition, the long-term rental market is also faltering in light of the high interest rates and the lack of economic viability on the part of entrepreneurs to enter to the field", Asraf concludes.
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