Rents in Israel has risen by only 4% over the past year, although the rise was expected to be higher, due to increased emigration from Israel, the Bank of Israel writes in the housing chapter of its 2024 report.
Rents only rose 4% in 2024, despite the fact that during the year about 75,000 homes in the south and north were evacuated, and 20,000 homes in northern Israel remained evacuated. These were removed from the effective inventory of apartments in Israel, and supposedly the combination of circumstances of such a large evacuation of apartments in Israel was supposed to increase demand for rentals and increase prices - which did not materialize.
One reason for this was that hotels were at low occupancy and were able to accommodate some of the evacuees. However, another reason was the negative migration balance, which increased greatly last year.
In 2024, there was a net decrease of about 18,700 Israelis, compared to a net increase of about 25,000 in 2023 and an increase of about 64,000 in 2022. "Based on the size of an average household, 3.25 people, this is a gap of about -19,300 households in 2024 compared to the average for the years 2022-2023," the Bank of Israel wrote.
Thus, a situation was created in which, while the evacuation of apartments in the border areas reduced the available housing stock, and negative migration reduced demand, probably by a similar magnitude, alongside the response provided to many evacuees by hotels.
Another factor in the decline in rental demand was the long reserve duty performed by thousands of young people, which during 2024 also greatly dampened rental demand.
Published by Globes, Israel business news - en.globes.co.il - on March 26, 2025.
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