Are Israeli Rents Really Falling? It Depends on the City and the Apartment

Have rental prices in Israel finally started to fall?

The answer is that rents may be easing in certain locations and property segments, but it is still too early to declare a nationwide reversal.

Data published by fintech company WeCheck and reported by ynet showed that the average monthly rent declined by 1.1% in June to NIS 5,113. At the same time, the number of homes offered for rent was 11.9% higher than in June of the previous year.

At first glance, that sounds encouraging for tenants: more available apartments and less pressure on prices.

A closer look at location, apartment size and property type reveals a far more complicated picture.

The national average conceals what is happening in Tel Aviv

While rents softened in some peripheral areas and among smaller apartments, prices in Tel Aviv continued to rise.

The city’s average rent increased by 0.4% in June compared with May and by 2.2% compared with the previous year, reaching NIS 6,766 per month.

The strongest pressure was recorded in four and five-room apartments. Average rents in that segment rose by 1.5% in a single month to NIS 9,584, representing an annual increase of 5.9%.

A national average can therefore fall while a family searching for a large apartment in Tel Aviv faces a more expensive market.

This demonstrates the limitation of speaking about “the Israeli rental market” as one unified market.

In practice, there is a market for small apartments in Be’er Sheva, another for family homes in Tel Aviv, another for protected apartments in Ashkelon and another for new units close to employment centres.

Smaller apartments saw more supply and sharper price declines

The relationship between supply and rent is particularly visible when the data are divided by apartment size.

The supply of one to three-room apartments increased by 17% compared with the previous year. Rents in this category fell by 1.3% during June.

The supply of larger four and five-room apartments increased by only 4.9%, while rents declined by a more moderate 0.9%. Seasonal demand from families during the summer also helps support prices in this segment.

This reflects a basic principle of real estate: price is not determined by the city alone. It is determined by the interaction between a particular type of property and the tenants competing for it.

When many small apartments enter the market simultaneously, tenants gain more choice and negotiating power.

When the supply of family-sized apartments remains limited, landlords may continue asking for higher rents even while the national average declines.

The comparison base matters

The reported 11.9% increase in supply appears dramatic, but WeCheck says part of it reflects an unusually low comparison point.

In June 2025, during Israel’s “Rising Lion” military operation, the number of properties offered for rent temporarily declined. Comparing the current market with that disrupted period therefore produces a sharp annual increase that partly reflects a return to normal activity rather than a permanent expansion in rental supply.

This distinction matters.

A single month with more listings or completed transactions is not enough to produce a lasting decline in rents. A sustained change would require consistent growth in the number of available properties, particularly in high-demand areas and in the apartment categories experiencing shortages.

Despite June’s monthly decline, the average rent in Israel remained 3.3% higher than it had been one year earlier. The latest figure therefore looks more like a temporary moderation than clear evidence of a reversed trend.

Why do different rental indices produce different answers?

A disagreement between rental indices does not necessarily mean that one of them is wrong.

Different measures may examine different populations, time periods and types of contracts. Some rely on surveys, while others use new leases, renewed leases, asking prices or transactions completed through a particular platform.

WeCheck says its figures are based on tens of thousands of real-time transactions. Israel’s Central Bureau of Statistics uses a different methodology and may therefore be capturing another part of the rental market.

The problem arises when a single statistic is turned into a broad conclusion about the entire country.

What does this mean for property investors?

For an investor, a 1.1% decline in the national average is not, by itself, a reason to buy or sell a property.

The more important questions are highly local:

How many comparable apartments are currently available in the neighbourhood?

How long do they remain on the market?

Is the property intended for students, young professionals or families?

Does it include a protected room, parking, an elevator or access to employment and public transport?

Are hundreds of new units about to enter the local market?

An investor who relies on a national average may overlook what is happening on the street where the property is located.

An investor who understands the specific source of demand may find an opportunity in a weak national market, or avoid an overpriced asset while national headlines remain positive.

What does it mean for tenants?

Tenants looking for smaller apartments in areas where supply has expanded may have more room to negotiate.

They can examine how long the property has been listed, whether the asking price has already been reduced, how many alternatives are available and whether the landlord is willing to be flexible about the move-in date or contract conditions.

Families searching for larger homes in high-demand areas may not benefit from the same trend. When supply is limited and demand remains strong, negotiating power usually stays with the landlord.

Average rents in Israel declined in June, but the national figure does not tell the full story.

The decline was concentrated mainly in smaller apartments and in some peripheral locations. In Tel Aviv and certain segments of the family-apartment market, rents continued to rise.

The most important insight is not necessarily the 1.1% monthly decline.

It is that the rental market is becoming increasingly fragmented.

Anyone trying to understand where rents are heading should stop asking only what is happening “in Israel” and start asking what is happening in the relevant city, neighbourhood and property category.

Source and reference:

 

https://www.ynet.co.il/economy/article/yokra14836196