Many apartment owners who rented short-term before the war are converting them into regular rental apartments. At the same time, delays in the opening of the academic year have contributed to increasing supply and decreasing demand for rental apartments. Apartment owners without secure premises are being forced to compromise more on price, due to falling demand. WeCheck, which provides financial solutions for landlords and tenants, reports that since the start of the war, the supply of apartments available for rent has increased by around 50% and rents have fallen by around 1.5 %.
Figures from WeCheck, which tracks all apartment rental sites, reveal that the supply of apartments for rent in November 2023 was 50% higher than in November 2022 and 25% higher than in October 2023. “These are very high and unusual numbers for November,” says the company’s survey. In normal years, November sees a decrease in the number of apartments for rent, due to the opening of the academic year and of the peak market period, which ends before the holidays.
Rami Ronen, CEO of WeCheck, says: “It’s not that all the problems in the rental market have been solved and suddenly a new supply appears. Absolutely not. This is a certain situation, and I guess if we talk about it in six months, we will see « It’s a reverse picture. Israel has not found a systematic solution to secure the housing market, either for « purchase or rental. »
Quadruple the number of small apartments
What happened in November to increase supply? Ronen says: “The first wave is related to personal safety. According to our estimates, only around a third of rented apartments have a secure bedroom. We have encountered situations where tenants in in-demand areas preferred to leave apartments without secure rooms and sublet them. In some cases this is done with the consent of the owners.
« The second wave is a significant increase in rented 1-2 room apartments. These are apartments that in most cases are rented for just one night on websites like Airbnb. As of November 2022, approximately 500 such apartments were offered for rent. and in November 2023, this number increased to 2,000 apartments. A fourfold increase is spectacular. People who own apartments for short-term rental realize that the year Next, the chances of renting them to tourists are very low and prefer to rent the apartment for at least a year, in order to minimize losses.
While supply has increased, demand has decreased. The first reason is the seasonality of the rental market: the period between Sukkot and Passover sees a drop in demand, even during normal hours. During the war, when many businesses closed and hundreds of thousands of people were called into the military reserves, the demand for rental housing fell more sharply than usual.
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Furthermore, in the conflict zones of the north and south, the demand for apartment rentals has completely fallen, mirroring the drop in demand for apartment purchases.
Beyond that, during this period, academic studies were believed to have begun in universities and colleges. Instead, the start of the academic year has been delayed, and this is also reflected in the rental market, especially in university cities – Tel Aviv, Haifa, Beersheba and Jerusalem. Landlords suddenly find themselves with empty properties and a loss of rent.
“Students have not rented apartments because a significant number of them are on reserves while others are not studying, and knowing their rental habits, they always show up at the last minute “, explains Ronen. « All this adds up to a large supply of apartments in university towns, where the future is uncertain, because it is not at all clear what the academic year will look like. The first semester could be shortened and many students could decide to stay in «
Ultimately, the increase in supply and decrease in demand affected prices, WeCheck reports. Prices fell on average by 1.3% compared to October 2023 and by 2.2% compared to November 2022. In any case, it must be taken into account that Tel Aviv, where more than 50% of residents rent apartments, distorts the average downward and that it is still too early to speak of a distinct trend in all cities.
Fall in supply in Beersheba
Looking at the cities themselves, the supply of apartments for rent in Tel Aviv jumped 160% in November 2023 to 4,000 apartments, half of which are three- and four-room apartments. The overall average rent paid these days in Tel Aviv is around NIS 6,700, and for popular three- and four-room apartments, NIS 7,230. In Netanya, which is not prone to rocket fire, the supply of apartments has doubled compared to last year, to 1,300 apartments, of which 25% are three- and four-room apartments.
At the same time, and unsurprisingly, in constantly bombed cities, supply increased considerably. In Rishon Lezion, Ashdod, Holon and Ashkelon, the number of apartments for rent in November increased by 40-50% compared to November 2022. Specifically in Beersheba, the supply of apartments decreased significantly, although the rents remained stable. Ronen says: “The uncertainty is great, but it is clear that prices will not rise again as long as supply remains at the current level. Apartment owners should expect to take longer to find tenants, who can conduct more successful negotiations. « .
Over the past year, WeCheck found that rents increased by 3.7% in Herzliya, by 2.4% in Rishon Lezion, by 1% in Haifa, by 0.7% in Jerusalem, and by 0. 1% in Beersheba. Rents fell by 3.3% in Ashdod, 2.3% in Tel Aviv, 2% in Ashkelon, 1.7% in Netanya and 1.3% in Holon.
A still little-recognized problem is the impact of evacuees on the rental market. WeCheck observes: “The evacuees are having an effect, but from the picture of the situation we have it is not entirely obvious, mainly because a large part of the evacuees are still in hotels, so many in the south than in the north. that we are seeing in supply, they are offsetting the increase in demand. »
The WeCheck figures differ from those released by the Central Bureau of Statistics’ Housing Services Index late last week, which showed a slight decline in rental prices, but at a more moderate pace. According to the Central Bureau of Statistics, tenants who renewed their contract in November paid 3.2% more than the previous contract and new tenants (sampled apartments where there was a change of tenant) saw their prices increase by 4.8%.
According to Ronen, his company’s data does not currently show similar increases: « We are checking 50,000 apartments that are on the market and the trend is downward. » There is an increase in supply, a decrease in demand and, in general, the market today favors renters.
Published by Globes, Israel Business News – fr.globes.co.il – December 21, 2023.
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