What has suddenly happened that everyone is now talking about rising rental prices? With all due respect to the many sporadic stories, we must admit, for the unfortunate tenants of the apartments (a variety of posts such as “Come and see what they demanded of me ten thousand shekels a month in Tel Aviv or Givatayim”), the Central Bureau of Statistics – the official body surveying 18,000 tenants At least quarterly shows detailed tables for 6 districts and 15 large cities – also reports in recent months relative stability (0% in April, 3.4% in the past year) in rental prices. It is true that we have a lot of criticism of the methodology and conduct of CBS surveys, but it is difficult to argue with the fact that they are a little more reliable than salon conversations, Instagram photos and even demand data on Internet boards that also work in the “successful method”.
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So yes, after apartment prices have soared 16.3% in the last year and 80% in the last decade, while rental prices have been content with the CBS with an increase of less than half of that, we are likely to see upward pressure. / Rent (purchase tax rose back to 8%) and when the interest rate in the economy returns to an upward trend (then why settle for a return of 2% -3% gross on renting an apartment).
And yet, cautiously, it may be that unintentionally, the unfortunate tenants of the apartments have in recent days and weeks contributed to a self-fulfilling prophecy. Inadvertently, they have been led and led quite easily by very biased stakeholders, who “feel sorry for” them on every stage and say that prices are breaking any reasonable line.
When the Minister of Housing or the Governor of the Bank of Israel wants to hear what is happening in the market, they of course meet the developers and contractors. Exactly the same people who desperately want us to buy apartments from them and not continue to live in rent, among other things with the constant mantra that who can trust the rental prices that will not jump to us in the future or tomorrow.
In addition, many developers today have extensive activity in the rental market, with more and more long-term rental projects. Although the state has managed to market a few thousand such apartments to developers, promiles from the volume of apartments rented in the market (about 700,000), but like the wagging tail of a dog, those companies run from stage to stage and tell how much rental prices in Israel are just waiting for the big break. Their profit from those forecasts is double – the increase in rents is also rolling into the income line, and they are recording huge amounts of real estate revaluations that reach the net profit.
At the same time, even a program like “Price per Tenant,” designed to produce apartments for sale at subsidized prices, is pushing up rental prices, with many of the winners renting out the relatively new and expensive apartments they bought. In addition, even in the old neighborhoods and cities, certainly in the center of the country, there is now a clear bias in rental prices, due to the momentum of urban renewal. Construction evacuation projects and NAP 38, which also eliminate small and old apartments and build new, larger and more expensive apartments in their place, and also generate a huge demand for rent during the construction period.
And if all that is not enough, alongside the regular seasonality of the summer months, think also of the countless politicians living in crises. The smell of the elections that is currently being carried in the air is twofold – in the Knesset and also in the municipalities (October 2023). There is nothing like slogans of helping young couples, and that every teacher and nurse can rent an apartment in the city, to launch a running campaign for prime minister or mayor.