Housing snapshot: Home sales and rentals across Israel

The last two months have seen Israel’s red-hot housing market cool just a little. Prices are stabilizing, according to new figures by the Central Bureau for Statistics, but they remain 11 percent higher than a year ago.

In Haifa, Jerusalem and the north, housing prices are reported to be continuing to rise, while evidence from Tel Aviv and central Israel suggests that although prices have slipped back, it is only by a very small amount.

Finance Ministry data has shown fewer transactions in recent months with both buyers and sellers wary of the uncertainties in the market. The government’s discounted housing lottery for first-time buyers, meanwhile, remains incredibly popular and over-subscribed, while data from the country’s National Planning Authority suggest that the number of new housing projects approved for building is at record-breaking levels. This will increase the number of homes available in the market over the next few years.

The average price for a home in Israel now means a budget of NIS 1,969,800 (about $540,000), a quarterly increase of more than nine percent compared to the first quarter of 2022. In Tel Aviv, the average price is NIS 2,962,300 (about $811,000), up 7.8% over the year, while in central Israel it is NIS 2.6 million (around $712,000). In Jerusalem, the average price is a little over NIS 2.4 million (around $660,000), with properties in the capital rising by more than in any other region, with increases of more than 18% year on year.

Would-be buyers need to fund a 25% down payment on these prices. With higher borrowing costs due to rising interest rates, they also need to earn enough each month to pay off a 75% mortgage at these levels. Mortgage costs have risen sharply over the last year as the Bank of Israel has steadily increased interest rates to 4.75% and the majority of homes have some element of their mortgage on a variable basis.

For those with dollars, however, Israeli property has become more affordable with the weakening of the shekel against the dollar. An increase to 3.67 shekels to the dollar (in March) may not seem significant compared to 3.36 shekels to the dollar (in January) but multiplied out it is allowing those buying in dollars to stretch their funds a little further, and to look to buy in the near term while the dollar/shekel rate is moving in their favor.

This month, The Times of Israel looks at some of the most popular places to live, and highlights what can really be bought for those “average prices.” The prices quoted are the actual prices paid over recent weeks, as recorded in Israel’s property tax database.

In Tel Aviv at the end of April, a three-room (two-bedroom) apartment on the sixth floor of 10 sold for close to the average price at NIS 3,031,288 (about $831,000). The apartment is on Asirey Tzion Street, in the southeast of the city close to the Kibbutz Galuyot interchange. Measuring 70 square meters (753 square feet), the apartment was completed in 2022.

In central Israel, in the city of Petah Tikva on Yitzhak Sadeh Street, a five-room (four-bedroom) sold for the average price in this area at NIS 2,610,000 (about $718,000). The sale at the beginning of May was for a new (2023) apartment measuring 112 square meters (1,205 square feet) on the fourth of 19 floors.

East of Tel Aviv, in the ultra-orthodox city of Bnei Brak, a four-room (three-bedroom) apartment on Abarbanel Street sold in May for NIS 2 million (about $550,000 – close to the national average across the whole country and relatively cheap for a central Israel location). The apartment dates from 1960 and measures 110 square meters (1,184 square feet) on the third floor of a three-story building.

Further north but still central, in the coastal city of Netanya, a five-room (four-bedroom) apartment of 118 square meters (1,270 square feet), built in 2017, sold for NIS 2,600,000 (around $713,000). The apartment is on the first of nine floors, on Yehuda HaLevi Street which is close to but not in the center of town, and the sale included a reserved parking space.

On Ref’ael Bar Levi Street in Jerusalem, in the outlying Har Homa neighborhood on the fringes of the city, a four-room (three-bedroom) apartment sold in early May for NIS 2,350,000 (around $644,000), in line with the city average. The apartment was built in 2017, measures 90 square meters (969 square feet) with an additional 30-square-meter (323 square feet) yard, and is located on the second of five floors. The purchase included a reserved parking space.

Between Tel Aviv and Jerusalem, in Beit Shemesh, on Yona Ben Amitai Street, in the Ramat Beit Shemesh Gimmel neighborhood, a four-room (three-bedroom) apartment on the third of nine stories sold in early May for NIS 1,900,000 (about $521,000). The apartment measures 89 square meters (958 square feet) and was built in 2016. The sale included reserved parking.

In Haifa on HaYam Road in the center of the city, a four-room (three-bedroom) brand-new apartment measuring 103 square meters (1,109 square feet) sold in late April for NIS 2 million (about $548,000). The apartment is on the third of 13 floors.

In Tiberias in northern Israel, the most expensive property to change hands over the last month cost less than the national average, with a sale price of NIS 1,600,000 (NIS 438,272). Built in 1992, it is located on Shaked Street in the Nof Kinneret neighborhood. The apartment has five rooms (four bedrooms) across 110 square meters (1,184 square feet) of space and is on the second floor of a three-story building.

In the southern city of Beersheba, there was a wider range of prices for properties changing hands. On Yehoyachin Street, sticking close to the national average price, a five-room (four-bedroom) apartment sold in early May for NIS 2,025,000 (about $562,000) as part of a single-story building constructed in 1970. The apartment covers 179 square meters (1,927 square feet) of space.

Rentals

Rental prices have been rising continuously for some time now. The latest inflation numbers show rents on renewal of contracts jumping 3.6% in April from the previous month, while rental values for new tenants rose by 9%. As more people look to rent — because a growing number of people cannot afford to buy a home — and those with mortgages on an investment property face higher bills, rental inflation looks set to continue.

The following selection of properties available to rent is drawn from Israel’s leading online housing site, Yad2, although frequently well-priced rentals in popular areas are shared only through word of mouth.

On Haim Barlev Street, in not-as-yet-fashionable southeast Tel Aviv, a three-room (two-bedroom) apartment measuring 70 square meters (753 square feet) is available for NIS 5,400 ($1,480) a month. The apartment is unfurnished and was recently renovated. It is on the fourth floor of four.

For a similar price — NIS 5,600 a month ($1,534) including local property bills — a three-room (two-bedroom) apartment on ֵEretz Hefets Street is marketed as a rental in the Shmuel HaNavi neighborhood of Jerusalem. The apartment is furnished and partly refurbished but measures just 35 square meters (377 square feet) in total.

On Ben Yehuda Street in central Haifa, a four-room (three-bedroom) unfurnished apartment is available for NIS 3,500 ($959) a month including local property bills (arnona). It covers 75 square meters (807 square feet) of space, together with a balcony, and is on the first of three floors.

In Tiberias, in a neighborhood not far from the Sea of Galilee, on Ahuzat Bayit Street, a four-room (three-bedroom) unfurnished apartment is available to rent for NIS 3,700 ($1,014). The apartment covers 120 square meters (1,292 square feet) of space, and includes a balcony and reserved parking. It is on the third of four floors.

In Beersheba, close to the Soroka Medical Center and Ben Gurion University, on Derech HaShalom, a four-room (three-bedroom) apartment located on the third of three floors is available to rent for NIS 3,060 ($838) per month. It covers 80 square meters (861 square feet) and has a balcony. It is available furnished.