10% of tenants do not pay rent due to the situation, nor do they vacate the apartment.
And what happened to prices?
The corona exacerbated the situation
Photography:
envato elements
Produced by the Department of Special Supplements
What is happening to the residential rental industry during the Corona period?
Many tenants who have been fired or evicted are unable to meet payments, prices vary from month to month and region to region, but the bottom line is that the industry is stable.
Tel Aviv has maintained relative stability in rental prices throughout 2020, in Jerusalem prices have risen and so have the cities of Ramat Gan, Kiryat Gat and Harish.
In Haifa, Be'er Sheva and Ashkelon, prices fell.
This emerges from a study by the company Difrant, which offers apartment owners a secure income from rent.
The survey covered all the bulletin boards advertising apartments for rent: Yad2, Homely, Como, Homeless,
win-win
as well as data from major real estate agencies.
Tel Aviv
The rent for a 1-room apartment in Tel Aviv increased by an average of 6.3%, from NIS 3,258 in 2019 to NIS 3,463 in 2020.
A 2-room apartment rose by 4.8% from 4,664 to 4,887.
A 3-room apartment rose by an average of 10.3% from NIS 5,919 to NIS 6,531.
Increases were also recorded in larger apartments of 4-5 rooms.
The average price for renting an apartment in Tel Aviv in December 2020 is NIS 5,488, only NIS 10 more than a year earlier.
Jerusalem
The rent for a 1-room apartment was NIS 2,635 in 2019, and increased by 5.6% to NIS 2,784 in 2020.
2-room apartments decreased by 3.8% from NIS 3,619 to NIS 3,482.
3-room apartments decreased by 8.5% from NIS 4,725 to NIS 4,342.
4.5 and 6-room apartments recorded increases.
On average, rental prices in Jerusalem rose by 8.7% from NIS 3,940 in December 2019 to NIS 4,283 in December 2020.
The rising
In Ramat Gan, prices rose slightly in the past year by 1.4%, from an average rent of NIS 4,738 to NIS 4,805.
In Kiryat Gat, prices rose by 7.4% from NIS 2,996 to NIS 3,219.
In plowing, prices rose by 1.9%, from NIS 2,786 to NIS 2,839.
The descents
In Haifa, a 2.5-room apartment fell by an average of 8%, from NIS 2,500 to NIS 2,300.
A 3-room apartment dropped by an average of NIS 3,700 to NIS 3,207, a decrease of 13%.
4-room apartments recorded an 11% decrease from NIS 3,960 to NIS 3,530.
5-room apartments fell by an average of 10% from NIS 5,000 to NIS 4,500.
In Be'er Sheva, a 4-room apartment was rented on average for NIS 3,050 in 2019, while in 2020 for NIS 2,450, a decrease of 20%.
3-room apartments decreased by 12.5% from NIS 2,400 to NIS 2,100.
2-room apartments decreased by 12% from NIS 2,225 to NIS 1,950.
About 10% of the residential apartments in Be'er Sheva were left empty without tenants.
A new phenomenon that arose in 2020: 60% of tenants requested a flexible contract in terms of the date of departure from the apartment and the dates of payment of rent.
In Ashkelon, small 2-room apartments fell by 12% from NIS 2,500 to NIS 2,200.
3-room apartments decreased by 3.7% from NIS 2,700 to NIS 2,600.
The rent for 4-room apartments remains at NIS 3,400.
The explanations
Elad Shrikki, CEO of Different, explains that the price fluctuations are mainly due to the return of investors to the market in July, with the Finance Minister's decision to reduce the purchase tax on another apartment from 8% to 5%. Especially in economically strong cities like Tel Aviv, these are solid investors looking for a safe investment. They see what is happening in the cities of the far periphery, where according to tests conducted by the Ministry of Finance, the return from selling an apartment in these places is far from guaranteed.
"In Tel Aviv there is a demand for small apartments, and here its strength is relative to other cities. In other cities, including Jerusalem, there is a growing demand for large apartments. The reason could be the Corona crisis, which caused people to work from home, rent large apartments Became in demand for students, who wanted to save money during the unemployment period.
Want to stay up to date all the time?
Sign up now for the Real Estate Newsletter today
Talking real estate with Ofer Petersburg. Listen to the new podcast >>
Fewer publications
Another trend recorded in 2020 indicates a sharp decline in the number of apartments advertised on the various sites.
At the end of 2017, 9,190 apartments were published.
In 2018, publications rose to 11,185.
In 2019, there was another jump to 16,346.
In January 2020 the publications reached 25,000 apartments.
At the end of the year, when the corona crisis was still in full swing, the number of apartments published dropped to 9,580 publications.
Helms data show that currently about 875,705 apartments in Israel are offered for rent.
According to data from the Homely company, in 2019 14,669 apartments for rent were advertised, while in 2020 this number dropped to 10,704 apartments, a decrease of 72%.
Loss of revenue
A survey conducted by Different among about 70,000 apartment owners for rent shows that about 10% of them experience a loss of income due to a tenant who does not pay rent or refuses to vacate.
The cumulative damage to the property owner can reach NIS 60,000, ie a loss of about 14 months' rent (according to an average rent of NIS 4,200).
The data also show that 21,124, who constitute 30% of apartment renters, are obligated to mortgage payments they took out to purchase the tenant, and they rely on rent as a mortgage payment.
Another 30% answered that they rely on rent as a living wage.
The data show that in Haifa there was the highest aggravation in non-payment of rent.
These are 220 cases, which are about 42% of all inquiries made to the company.
It is clear that the corona crisis has exacerbated the situation of homeowners due to non-payment of rent, delay in payments and inability to evict tenants who do not pay.
Different notes that during the past year there has been a worsening in meeting tenant payments, and therefore there has been a 477% increase compared to 2019 in applications by apartment owners to the company due to non-payment of rent or refusal of a tenant to vacate the property.
There was also a 350% increase in tenants' applications to join the service of Different, due to the worsening of the demand of apartment owners for guarantees and deposits for the lease.
The reasons for non-payment of rent are due in the vast majority (83%) to economic difficulties due to unemployment or unemployment.
The damage to the landlord includes loss of rent, legal expenses, claim for rented eviction, court fees and execution.
so what are we doing?
At Different, we built a model that aims to give apartment owners for rent peace of mind by providing services and a full guarantee for the rent.
The company takes full responsibility and guarantees full rent to the landlord even in a period of crisis and breach of contract.
All this in accordance with the law and while maintaining a good relationship between the landlord and the tenant.
"The Corona crisis has exacerbated the situation, and we have realized that sensitivity must be shown to overcome the crisis," Elad Shrikki said.
"We have doubled the service people, mediators and professional consultants in order to help both sides spread the debt and defer payments."
Produced by the Department of Special Supplements