2023-07-19 13:58:51
According to published data released last weekend by the Central Bureau of Statistics, rent prices continue to climb: the monthly rent jumped by 9.8% in apartments where a tenant changed, and by 3.9% in apartments where the tenant renewed his contract. In total, in the last year the average rent increased by more than 5%.
Many renters accept the situation because they understand that there are no better alternatives in their area of residence. Some stay in the apartment just so that the price does not increase significantly. Conversations with tenants and apartment owners reveal that often landlords are also tenants, which makes it difficult for them not to raise the rent of their tenants, after the rent in the apartment they live in increases, as do the mortgage repayments due to the increase in interest rates.
An upward trend, but not in all cities
According to data from the website Yad 2, which analyzed thousands of ads in 21 major cities in Israel, in the cities of Givatayim, Kiryat Motzkin and Kiryat Bialik – rental prices for apartments with five rooms or more jumped between 8% and 13%, an increase of NIS 300 to 1,000 per month. In Bat Yam, Petah Tikva, Herzliya, Holon, Netanya and Kiryat Motzkin, the average price in ads rose between 4% and 7%, which is about NIS 300 per apartment.
According to the ads of Yad 2, which reviewed the changes in ads between the second quarter of 2022 and that of 2023 – three-room apartments in the whole country registered an average increase of 1.2%, four-room apartments 0.4% and five-room apartments increased by 2.4%. According to the analysts of Yad 2, the difference between the places is due to the supply situation in the city and the trend is not uniform. Looking at the price index for five-room apartments, Kiryat Ono, Ramat Gan and Rishon Lezion actually recorded a decrease in prices, by 4% to 8% – a decrease of NIS 700 to NIS 300. 3-room apartments in Rehovot, Kiryat Bialik and Hadera also recorded a decrease of about 3% – about NIS 100 decrease in each of them.
Ayelet Nitzan, VP of Marketing of Yad2 (Photo: Tal Raviv)
The analysts of Yad 2 claim that the difference between the cities lies in the issue of supply, while in places where the renters have more bargaining power with the landlords, they manage to lower the price. “There is a larger supply of apartments in Ramat Gan, and there were 5% price decreases in the rental prices for 5-room apartments, compared to nearby Givataim, where the supply is smaller, and prices jumped 13%,” explains Ayelet Nitzan, the site’s VP of Marketing. According to her, in cities where rental prices are already high, such as Rishon Lezion, Kiryat Bialik and Rehovot, the landlords are forced to lower prices in order not to leave the apartments empty. F. In other words, although a decrease was recorded on the page, this does not necessarily indicate a general trend of falling prices.
“If I were a new tenant, they would raise the price more”
Meir and Tamar, who rent 3-room apartments in Rehovot, where the average rent per apartment is NIS 4,050 (and as mentioned has registered a decrease of 4%), told ‘Daver’ that their landlords intend to raise the prices per apartment by several hundred shekels when they sign the next contract. Tamar’s landlady told her that she is updating the rent by 5% – an increase equivalent to the increase in the rent of the house where the landlady lives on rent.
Hadar Haim, who rents a 3-room apartment in south Tel Aviv, which has seen a price increase of between 3% and 5% in the last year, says that her rental prices have only increased by a few hundred shekels in the last three years, but that is also because of her good acquaintance with the landlady. “The demand is huge. I considered moving to another place in the south of the city for similar apartments, but the prices that the landlords are asking there are between 500 and 1,000 shekels high for the same apartment,” she says. “That’s why I try to do everything to stay on my contract, even though the apartment is less suitable for me.”
Mittal, a resident of Ashkelon, who rents an apartment with roommates for five months in the new neighborhoods of the city, claims that the prices in the city have hardly changed. “Proportions must be maintained,” she says. “From time to time you see ads here about high prices, but it’s just an attempt by investors to attract tenants from outside.” According to her, the significant difference in apartments in the city, which has seen a stagnation in rental prices in the last year, is between apartments with or without MMD, differences that reach up to about NIS 1,000 a month.
“My heart goes out to the tenants, but I’m not closing the month”
Haifa, which continues to have the lowest rental price level of all major cities (between 3,370 and 5,700 NIS for 3- to 5-room apartments) has recorded an average 3.5% increase in prices over the past year, with the percentage increase in the prices of five-room apartments being one of the highest in the country. “Our rent has gone up by 150 NIS, it’s annoying because it’s already high,” says Ron, a resident of the city. “We tried to talk to the owner, but he said that the mortgage and the interest rate bind him.”
Most of the tenants said that when they tried to understand the reason for the increase, the owners stated that they themselves were renting somewhere else or paying a mortgage on an existing apartment, and that for most of them it was the apartment where their children live. “Our mortgage repayment went up by NIS 300, the rent went up by NIS 350, so we had to raise the tenants’ rent,” says Nadia, a resident of Jerusalem who rents an apartment there and at the same time rents an apartment in Haifa, on which she still pays a mortgage. “Our tenants are amazing and my heart is strong – but I can’t close the month.”
Dorit Sadan, joint CEO, Neve Ha’ir real estate marketing company (Photo: Rami Zarnagar)
“The apartment owners who rent out have suffered a significant increase in their inputs – their mortgage has also become more expensive and they have to raise prices to balance” says Dorit Sedan, CEO of the Neve Ha’ir real estate marketing company. According to her analysis, many potential buyers made a decision in the last year not to purchase residential apartments and froze the increases in the market, as the Bank of Israel intended, but sitting on the rent fence increased the demand for rental apartments and thus created an incentive to raise prices. “The matter of demand and supply exists, but the more significant reason for the increase in prices is the sharp increase in interest rates in the economy, which makes it difficult to buy an apartment and sends many to the rental market.”
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