CBRE Israel: Rental prices dropped 20% since Q1

According to a study by CBRE Israel, Tel Aviv is ranked 25th in the world among metropolitan cities in office rents.

A general view of Tel Aviv's skyline is seen through a hotel window in Tel Aviv (photo credit: REUTERS)
A general view of Tel Aviv's skyline is seen through a hotel window in Tel Aviv
(photo credit: REUTERS)
During the year before the coronavirus crisis, thousands of private individuals invested heavily in purchasing income-producing real estate in new office towers for rental.
According to a study by CBRE Israel, Tel Aviv is ranked 25th in the world among metropolitan cities in office rents.
The coronavirus crisis has led to a slump in demand for income-producing real estate and a fall in prices, according to the research. This is a decrease of about 20% in office rental prices compared to the first quarter of 2020 (before the coronavirus crisis began).
Jacky Mukmel, chairman of CBRE Israel: “In light of the fact that most people who have made transactions for the purchase of income-producing real estate have taken loans from the banks to carry out these transactions, they are in distress: on the one hand there is no demand and there is a drop in rents. Whether to sell at a loss, whether to continue to own the property and expect a better period, whether to defer the loan from the banks, whether to rent for a low fee and lose money...”
According to a study conducted by CBRE, thousands of Israelis purchased income-producing real estate of about 1 million sq.m. with an estimated value of about NIS 9 billion.