About 28% of households live in rented accommodation.
Only 7% prefer to rent for the short term.
Geocartography Institute Survey
Housing and construction in an apartment project for rent on Derech Hashalom
Photography:
Imaging: olin
Produced by the Department of Special Supplements
In light of the increase in the number of rented households, a new survey by the Geocartography Institute sought to examine what type of rental housing the public prefers?
"The rental market has been on a 4% upward trend over the past two decades," notes Dr. Rina Degani, CEO and owner of the Geocartography Research Institute.
"Today, about 28% of households in Israel live in rented accommodation. The rent group is very diverse and includes students, young couples, households that cannot afford to buy an apartment, and households that have chosen to live in rented accommodation in areas of demand."
According to geocartography, due to a shortage of supply versus demand for rental apartments, rental prices have soared in the entire Gush Dan metropolitan area, especially in Tel Aviv.
In a city where more than half of the residents live in rent, the average rental price of a 2.5 or 3-room apartment in 2018 was about NIS 5,520 per month, 60% higher than the national average and 84% higher than the same apartment a decade earlier.
"In light of the data indicating a steady rise in rental prices, it would be only natural that in areas of demand and in particular in the Gush Dan metropolitan area there would be a preference for long-term and price-protected rents," says Degani.
5 times prefer to rent long term
In a survey that examined what type of rental housing the public prefers, about 500 respondents from the age of 18 to the third age participated, divided into 3 categories (21-34, 35-54, 55+), women and men from all sectors that constitute a representative sample.
Here are the main findings.
There are huge gaps in the ratio of almost 5 times between the preference for long-term and sheltered housing and short-term rent.
More than a third of the public is interested in a long-term rental housing solution (about 34% on average), compared to short-term rent, which they preferred slightly more than 7% on average.
About 34% indicated that they were not interested in living in a rented accommodation, about 9% stated that they did not find a difference and about 15% of the respondents did not decide.
Almost half of the residents of the center (49.4%) expressed a willingness to live in long-term rent in the Tel Aviv metropolitan area, about 20% in the lowlands and in the heart of the Sharon (lowlands 11.3%, Kfar Saba and Raanana 8.8%) and the rest in other parts of the country.
More than 35% of respondents aged 21-54, who are the majority of survey participants, prefer long-term rental housing.
Even among the older population, aged 55+, there is a great preference for long-term rental housing (over 30%).
Only about one-fifth of young people aged 21-34 (19.6%) and adults aged 35-54 (21.5%) preferred long-term rental housing in the Tel Aviv metropolitan area.
In contrast, about a third (31.5%) of adults aged 55+ preferred living in the area.
Despite their relatively small size, between 9 and 10% of respondents of all ages chose Kfar Saba and Raanana as favorites for long-term rental housing.
The Sharon area and the southern area are the most popular among the public for long-term rent from a contractor, about 38%.
The most attractive areas for long-term rental housing in almost the same way are the Sharon area (37.8%) and the south (38.2%) and the central area (35.6%).
They are followed by Jerusalem (31.1%) and the North (30.3%), which were found to be less attractive.
Among the respondents, it can be seen that the residents of the Jerusalem area are the most loyal (80%) to their area of residence and are interested in continuing to live there on a long-term lease.
The other respondents from the area preferred long-term rental housing in the Sharon area, the Shephelah and the rest of the country.
More than 40% of Sharon residents are interested in staying in their area of residence, but living in long-term rentals in the cities of Kfar Saba and Raanana.
About a third of the residents of the Sharon chose the Hadera-Netanya area as their favorite for a long-term lease.
Only 10.8% chose the Tel Aviv metropolitan area, and the rest in the rest of the country.
Demand is growing
Demand for long-term rental housing: Despite the plans and growing supply of long-term rental housing, according to the survey results and given the levels of demand and housing, especially in the central and Sharon areas, Of a decrease in the number of owner-occupied dwellings.
Jerusalem was found to be a leader in the demand for long-term rentals among its residents, but in practice there is only a single tender for 128 housing units.
High gaps were also found in the Sharon area - large demand for long-term rental housing and a large shortage of existing or planned supply.
Given these gaps, there is great potential for entrepreneurs and investors.
Talking real estate with Ofer Petersburg. Listen to the new podcast >>
Degani: "Although in recent years the large companies have started operating in the long-term rental market, some as part of tenders for renting apartments and some independently in the field, not in all areas and in particular not in all areas of demand.
For example, in the Kfar Saba - Raanana - Hod Hasharon triangle, with the exception of one project in Raanana, the supply of housing from an institution for long-term rent has not yet developed.
This is despite the high demand for housing in these cities, as indicated by the results of the survey.
"Great potential, little activity"
More and more real estate companies are entering the rental business.
Bardugo Group, for example, is owned by developer Lior Bardugo, which initiates rental and residential projects in the Tel Aviv metropolitan area to the tune of about 4,000 housing units.
In Kfar Saba and Rehovot, the company has begun initiating the construction of more than 2,000 housing units for long-term rent. According to the CBS, Kfar Saba is ranked third in terms of rent.
A shortage of new residential projects, a shortage of small apartments, natural growth and a positive migration balance have created high levels of demand among young couples and students.
About a third of the households in the city live in rent, a high figure compared to the national average.
"The field of rental housing has great potential in Israel, but the volume of activity in it is small and unrealized and the demand is high," says Lior Bardugo.
"The lack of long-term planning, lack of supply and price increases perpetuate the housing crisis. In the absence of government policy, we successfully promote rental housing projects together with local authorities, using private land and without allocating space from the authority."
Produced by the Department of Special Supplements