The average monthly rent for an apartment in Tel Aviv in the second quarter of 2024 was 7,000 shekels, an increase of 4.9% over the second quarter of 2023, according to what the Central Bureau of Statistics reported.
Despite this statistical increase, industry sources say that rents have practically fallen. “Over the past year, rents have stabilized compared to the situation in the market before the war,” says real estate agent Shirley Werner of RE/MAX-Ocean, which runs three agencies in southern, central and northern Tel Aviv. Most landlords have become less inclined to inflate rents, and it has to do with the real value of apartments. In other words, rents do not rise although there are isolated cases in some properties.
Small apartments are less in demand
According to the Central Bureau of Statistics, rents for large apartments in the city increased more compared to small apartments. Monthly rents for one- and two-room apartments rose by 2.5% to NIS 5,242, while rents for apartments with more than 2.5 rooms rose by 4.6%-4.9%. The average monthly rent for a 4.5-6 room apartment was NIS 10,601.
“I deal with brokerages mainly in the city center, northern Tel Aviv and the new areas,” says Keller Williams agent Shahar Tal, who is also a real estate appraiser. “In small apartments of 1.5-2 rooms, the change is not that big. There it may have had an impact on this market.” , because the young people who lived in these apartments, the young people working in restaurants and bars, left the city or returned to live with their parents and thus demand shrank and rents fell because perhaps before university studies resume, students looking for small apartments will return.
The rental market is also seasonal. Ahead of the summer, rents are rising as families and young people enter into contracts before the start of the school year. “In May and June, rents go up while rents go down by July and August and even more so in September,” Tal says.
Concern about an apartment remaining empty for a long time can cause landlords to reduce rents. Werner mentions a lease that closed for NIS 1,000 less than the asking price. “If in the past the apartment owners were committed to the price and because of the high demand in the end they would be closed at the requested price, today the situation is completely different. We all live in a country and there are many who have been affected at the business level and many people have been called to reserve service.”
“I can give an example of an apartment in the Old North that was rented on September 25. The owner tried to rent it himself and advertised it for a month for 10,500 shekels per month and the apartment was not rented. We rented it. Yesterday for 9,500 shekels per month, people understand that it is better to reduce Rent a little and not leave an apartment empty for another month.”
Impact of dust and noise from construction sites
The city is full of construction sites due to light rail construction, urban renewal projects and new construction, and Werner claims that rents are affected, among other things, by these construction sites. “Over the past eight months, we have completed about 130 rental deals in the city. The issue of construction sites in the center and the Old North is a real nuisance and this is also reflected in the rents. People are reluctant to live near construction sites. For example, the apartment I mentioned earlier is located In the Old North and next to it will be the Tama 38 (Earthquake Reinforcement and Expansion) project. In the regular market they will receive 10,500 shekels per month, but in these circumstances there is more flexibility among the land owners.”
Werner explains the differences between Tel Aviv areas and rentals. “In southeast Tel Aviv, like Yad Eliyahu and Kfar Shalem, rents are quite flat compared to last year. There is no big rise, maybe 100-200 shekels a month. There is more demand and less supply, and this is where people are really looking for newer apartments with security rooms.” This is despite the fact that the situation has calmed down and there is a significant decrease in demand for safe rooms in rented apartments.
She adds that rents vary greatly in the city’s southeast. “You can rent a four-room apartment for 6,000-8,000 shekels, depending on the neighborhood and area. Yad Eliyahu is more expensive in these areas. In Neve Hin we rented a four-room apartment with an elevator and parking for 6,500 shekels. In a relatively modern building in Yad Eliyahu, we rented an apartment With a five-room garden in a newer building with a security room and parking for NIS 8,600, the price may be high for the area, but compared to a five-room apartment in the north of the city with similar specifications rented for about NIS 15,000.
“In Jaffa, a renovated, furnished apartment of 50 square meters, consisting of two rooms, is rented for 7,500 shekels per month. Less luxurious specifications can reduce the rent by 1,500 shekels.”
Luxury market – monthly rent 40,000 shekels
Shahar says the trend he sees in the major luxury goods market since the Bank of Israel raised interest rates. “In the luxury sector, there is an increase in rents. Penthouse apartments are very expensive and rents have risen to about 30-40 thousand shekels per month. The increase in rents is due to the fact that wealthy people were considering buying luxury properties for 12 million shekels and above, no I see the point of buying when the interest rate at the bank is good and they would rather rent an expensive apartment instead.
“Tomorrow I will offer an apartment to a client who wanted to buy an apartment for 12 million shekels. He has money, but the situation is unstable and the money is in the bank to get interest, so he prefers to rent an apartment for 20 shekels. -25,000 per month I currently have 10 expensive apartments and we recently rented Many of the apartments are expensive and there is crazy demand for them. For example, there is a very luxurious penthouse apartment for rent in New Ramat Aviv for 40,000 shekels per month that will close soon.”
Published by Globes, Israel Business News – en.globes.co.il – on October 13, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
Comments are closed, but trackbacks and pingbacks are open.