The impact of the war on the rental market is evident in significant price drops following a period of increases. A recently published report shows that rental prices in most Israeli cities decreased from January to March this year compared to the same period last year by an average rate of up to 20%. A decrease in rent was also noted compared to the last quarter of 2023, coinciding with the surprise attack by Hamas on October 7, which initiated a war.
Where were the steepest declines? The Madlan website, in collaboration with Walla Real Estate, identified the cities experiencing the greatest rental price drops in Israel in the first quarter of 2024 compared to the last quarter of 2023, against the backdrop of the war. The analysis covered 3- and 4-room apartments in all cities across the country.
So, which are the 2 cities boasting significant price drops in both 3- and 4-room apartments?
4-room apartments: The largest decreases recorded in 2023
- Madlan's analysis reveals that 4-room apartments in Ma'alot Tarshiha saw the largest discount percentage. In the last quarter of 2023, the average price of a 4-room apartment in the city was NIS 4,159, while in the first quarter of 2024, it dropped to NIS 3,333 on average, marking a decrease of 20% in price.
- Givat Shmuel follows closely with a decrease of 19%. In the last quarter of 2023, the average price of a 4-room apartment was NIS 6,546, dropping to NIS 5,300 in the first quarter of this year.
- Yehud Monson experienced a decrease of almost 14%, with the average apartment price dropping from NIS 6,771 in 2023 to NIS 5,832 at the beginning of the year.
- Another northern city on the list with significant decreases in rent for 4-room apartments is Migdal Ha'Emek. The average price of an apartment in 2023 was NIS 4,345, dropping to NIS 3,776 in the first quarter of the year, a decrease of 13.3%.
- Kiryat Gat in the south rounds up the top five with a decrease of 13.2%, with the average price dropping from NIS 3,827 in 2023 to NIS 3,322 in 2024.
3-room apartments: The largest decrease recorded in 2023
- Madlan's analysis also indicates that 3-room apartments in Pardes Hana Karkur experienced the largest discount percentage. In the last quarter of 2023, the average price of a 3-room apartment in the settlement was NIS 3,927, dropping to NIS 3,228 in the first quarter of 2024, marking a decrease of almost 18% in price.
- Yehud Monoson follows with a decrease of 16.66%. In the last quarter of 2023, the average price of a 3-room apartment was NIS 5,738, dropping to NIS 4,782 in the first quarter of this year.
- Herzliya saw a decrease of 15.4%, with the average apartment price dropping from NIS 11,295 in 2023 to NIS 9,556 at the beginning of the year.
- The northernmost city on the list with the biggest decreases in rent for 3-room apartments is Nahariya, where the average price dropped from NIS 3,376 in 2023 to NIS 2,919 in the first quarter of the year, a decrease of 13.33%.
- Kiryat Gat also appears in the top five with a decrease in rental prices of 12.35%, dropping from NIS 3,165 in 2023 to NIS 2,774 in 2024.
"Although there are quite a few evacuees tired of hotels and renting apartments all over the country, it seems that rental prices are still on a downward trend. Today's renters, particularly the evacuees, are no longer interested in apartments without MMD, leaving them unoccupied and forcing owners to compromise on rent to avoid vacancies," Madlan CEO Tal Kopel said.
"As in any field, in real estate, the war creates uncertainty that affects decision-making," he said. "While apartment owners previously knew they could easily find new tenants at the end of a contract, during this period, they may be willing to compromise on price provided longer contracts are signed."