Calcalist, Dov Cohen, 19.02.2020
In the past year, rental rates in Israel rose by 2.8%, continuing the upward trend since 2008. However, just last weekend, the Central Bureau of Statistics (CBS) published, for the first time, data on the rental market - unlike the data received to date on this market, From private entities such as the Hand 2 site and others, the data included in the index's publication provide a "sophisticated" understanding of the market by including rental prices by apartment sizes and throughout all quarters since 2017, in 14 cities across the country.
According to the data, Ashkelon is leading the rise in monthly rent among the cities surveyed. There, renters pay an average of NIS 2,884 a month - an increase of 5.7% on average compared to the third quarter of 2019 - double the index rate. This leap may also reflect the change in the mix of apartments in the city, which has undergone accelerated construction processes in recent years. Overall, rental rates in the city have risen by nearly 16% over the past three years.
As expected, Tel Aviv is the most expensive rental city. The rent for small apartments of up to two rooms reaches an average of NIS 4,513 a month, which is more than a monthly rent paid in Beersheba for large apartments of 6-4.5 rooms (NIS 3,817 per month); And similar to the rent paid in Holon for 4-3.5 room apartments (NIS 4,527 per month).
The rent of small apartments in Tel Aviv increased by 3.8% - more than the average increase recorded in the entire city (3.4%). Another type of apartments that attracted Tel Aviv's upward trend was that of 4-3.5 rooms, which rose 3.6% to NIS 6,989 a month. In contrast, the large apartments of 6-4.5 rooms in the city increased by 1.1% to NIS 9,264, and the mediocre apartments of 3-2.5 rooms increased by 2.6% during 2019, to an average of NIS 5,673 a month.
Of the major cities, the person who ranks second in the country in terms of rent is Ramat Gan. In the past year, city rent has risen by an average of 2.2%.This is a lower increase than the general index. In the last quarter of 2019, the city average reached NIS 4,516. The large apartments (6-4.5 rooms) are the ones that have drawn the overall city average up, with an average increase of 4.6%.
Rents on small apartments of up to two rooms rose to an average of NIS 3,381, and 3-2.5 room apartments increased their rent by 2.8% to NIS 4,321.The monthly rent on 4-3.5 room apartments rose 1.5% to NIS 5,303 per month.
Jerusalem stalemate
Jerusalem ranks third among the largest cities in Israel in terms of rent prices.Rental prices in the city rose by 3.2% in the previous year to an average of NIS 4,351 a month.
The rent on 6-4.5 room apartments remained frozen this year, reaching NIS 6,285 a month. In contrast, in the 4-3.5-room apartment level, the largest increase in rent was recorded, which reached 3.3%. The rent on these apartments in the capital reaches an average of NIS 5,037 - the third highest in Israel in this category.
The fourth place in rent was Rishon LeZion. Even when the rise in rental prices was lower than the general index, it reached 2.2%. The average rent in the city comes to an average of NIS 4,117. The one who pulled the index up was the large apartments of 6-4.5 rooms, which rose 4.1% to NIS 5,743 a month on average.
The third largest city in the country, Haifa, is in the penultimate position in terms of rent, and last place in terms of immigration rate - only 0.9% in 2019 compared to 2018. The average rent in the city reached NIS 2,687 at the end of 2019. Rents in the small, 3-2.5-room apartments rose by less than 1 percent last year, reaching NIS 1,992 and NIS 2,545, respectively.
According to Israel Abramov, CEO of Eldad Psagot , "The fact that the average rental price has crossed the NIS 4,000 mark is a certificate of poverty for the Israeli housing market, and is primarily due to the critical shortage of construction starts and especially the number of residential units available. In fact, a price plan for a dweller that was supposed to benefit the young couples created severe pressure on the rental market by not allowing many groups in the population to buy an apartment.
"In my view, the most effective way to curb rental prices is to increase supply under preferred conditions. That is, to designate new apartments for long-term rentals at better prices than those dictated by the market.
"This has been known for many years in many European countries and elsewhere in the world. This format should be adopted in Israel as well, and offer an alternative to those who cannot or do not want to buy an apartment, but are interested regularly. Nobody wants to be a plaything in the hands of the tenants."
How much can urban renewal help curb increases in rents?
"I can attest to our activity - Eldad Psagot is now building entire neighborhoods and expanding the market in a way that allows young local residents - Atlit, Givat Olga, Hadera and more - to stay in their neighborhoods. Expanding the supply of existing multiples in evacuation-construction projects is the way to keep prices down. Will climb. "
Is it right in your view to require urban renewal projects to incorporate long-term rental apartments into their projects?
"I personally very much believe in long-term rentals - but not necessarily in urban renewal projects. For example, for example, Eldad Psagot has just acquired a large area in Givat Shmuel on which offices and commercial buildings will be built, along with student dormitories, some of which will be rented long-term."