Israel's Rental Market Surges as Average Rent Hits 5,063 NIS
Rental prices in Israel have surged significantly since 2022, with the nationwide average reaching 5,063 NIS. Nearly 30% of Israelis now rent, with Tel Aviv leading at 50%.
Rising Rental Prices Across Israel
Rental prices in Israel are steadily increasing. While there are months when we see a slight moderation in rental rates, this does not change the overall picture. An apartment that cost 4,500 NIS a decade ago will very likely cost you 7,000 NIS today. This is not a minor increase, but a price surge that has manifested primarily since 2022. When interest rates rose, landlords passed the burden onto tenants. The rise in the cost of living and the decline in disposable income have also contributed to this trend.
According to data from the fintech company WeCheck, the average rent nationwide stood at 5,063 NIS. These are average prices that also include small apartments. When looking at 4-5 room apartments, the price is clearly much higher. For small apartments of up to 3 rooms, the average price stands at 4,328 NIS, while for 4-5 room apartments, the price is 6,451 NIS. Rental prices remain significantly higher than the levels recorded in August of last year, with rent increasing by 3.7%. For larger apartments, the annual increase is even higher at 4.2%. When increases occur year after year, it is evident that there is a systemic problem.
The Growing Share of Tenants
The percentage of apartment renters in Israel is close to 30%. A decade ago, only 26% rented apartments, but this percentage is growing. Given these figures, how can one claim that people in Israel only buy apartments and dislike renting? Relative to the global landscape, our ranking is quite high. Furthermore, we must not forget that the number of people owning 2-3 apartments is higher. Every rented apartment naturally has an owner, but the measurement reflects the percentage of residents living in rental units. With housing prices so high, it should come as no surprise if the percentage of renters rises to a third in the coming years.
Using Central Bureau of Statistics data, we examined the percentage of rental apartments in major cities with over 30,000 apartments and reliable data. Rishon LeZion and Kfar Saba lacked sufficient data and were thus excluded. The highest percentage of rental apartments in Israel is found in Tel Aviv, where nearly 50% of residents are renters. Ramat Gan ranks second with close to 42%, followed by Haifa, Bat Yam, and Herzliya. In Jerusalem, which has over a quarter of a million apartments, less than a third rent. The same goes for Netanya, where residents traditionally prefer buying apartments over renting.
City-by-City Rental Breakdown
Among the larger cities in terms of apartment volume, Ashdod has the fewest renters at less than 27%. In Petah Tikva, the situation is slightly higher at 29% renters, though the number of apartments reaches about 90,000 compared to about 71,000 in Ashdod. In Ashkelon, nearly 30% are renters.
Rental prices across various cities provide a clear index of the market. As noted earlier, rental prices rose by 3.7%, with certain cities experiencing significantly sharper spikes. In Jerusalem, prices jumped by 7.4%, bringing the average apartment rent to 5,758 NIS. In Tel Aviv, the madness continues with close to 7,000 NIS for an average apartment, despite a large portion of these units being small and lacking a secure room (Mamad). In Tel Aviv, prices are surging by 3.6% annually.
"If rental prices continue to soar, what will tenants do? If they cannot purchase an apartment due to high housing prices, they will have to move to smaller apartments, and some families simply cannot afford that."
These data points raise difficult questions about the future of the Israeli housing market and the financial stability of nearly a third of the population.
