Rents have been rising in the summer months, after falling by about 1% in the months immediately following the outbreak of war, according to data from rent insurance company WeCheck, which match the trend emerging from Central Bureau of Statistics data.
According to the Central Bureau of Statistics’ housing services index, rents have risen by 2.2% since the low recorded in February this year, and by 0.7% in June alone.
WeCheck arrives at a similar figure for June, and a rise of 1.1% in May, but its measurement method is different. The company calculates a simple average of homes rented, whereas the Central Bureau of Statistics takes into account variables such as the age of the building, the size of the home, and so on, which means that it may find that rents for a certain type of apartment in a certain neighbourhood have risen, but that this is because of the mix of apartments rented out. WeCheck stresses, however, that the rental market has not returned to the price levels of last year, and that the average rent in June 2024 was 2.9% lower than in June 2023.
The highest rents in June this year were in Tel Aviv, where the average rent for a 1-5 room apartment was NIS 6,733 monthly. The lowest rents were in Beersheva (averaging NIS 3,026 monthly), Haifa (NIS 3,630), and Ashkelon (NIS 3,611).
Another important factor, which is an indicator of what can be expected in the coming months, is the supply of homes for rent, which is in decline, according to WeCheck’s survey of rental websites. Between May and June this year, the number of homes offered for rent fell by 4.4%, while in comparison with June 2023 the decline is nearly 30%.
WeCheck CEO Rami Ronen said that this trend was due to the small number of new homes being added to the market, a tendency for existing leases to be renewed, and to homes being taken off the market because of the high interest rates and low returns on rentals.
At the macro-economic level, the market’s seasonal behaviour is highly significant. The Central Bureau of Statistics’ housing services index rose sharply and consistently during 2022 and in 2023 in the months before the war, despite the fact that the rental market is a seasonal one that usually moderates or even falls during the Jewish festival period in the fall and in the Passover period in the spring, and also in the winter months, from December to February.
The war intensified the seasonal element, with the declines of the Jewish holiday period merging into the winter season, creating a sequence of five months of declines, between October 2023 and February 2024. Immediately afterwards, however, in a kind of boomerang effect, rents rose significantly in April and the Passover holiday period, merging into the natural rises of the summer months.
Published by Globes, Israel business news - en.globes.co.il - on July 22, 2024.
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