Housing snapshot: Home sales and rentals across Israel

Israel’s property market has been slowing down in recent months, with far fewer homes changing hands as rising interest rates and inflation bite into potential buyers’ finances. The latest housing figures show that in some places — including Tel Aviv — prices have actually started to fall.

Housing prices had rocketed over the past two years as the pandemic faded, given rampant inflation at home and abroad. In December, the statistics bureau said home prices were 20% higher in September-October 2022 than a year earlier. That figure has now fallen to 12.7%, when comparing January-February to the same period in 2022.

Double-digit housing inflation over the last 12 months has left the “average home” costing around NIS 1.9 million ($521,970) — and closer to NIS 3 million ($ 824,165) in Tel Aviv. Would-be buyers need to find a large downpayment of at least a quarter of the price, and earn enough to pay off a mortgage with costs that have risen sharply over the last year. Bank of Israel base rates are now up at 4.5% while interest rates available for home loans are typically some way above this.

One way to make the available budget stretch further is to focus on older, smaller apartments that are outside the larger cities. Provided there is good transportation to potential employment centers, there are locations that can still offer at least relatively affordable options. This week, The Times of Israel looks at family-sized homes in less in-demand towns and cities across the country, tracking actual prices paid over recent weeks recorded in Israel’s property tax database.

1. The proximity to Tel Aviv pushes Givatayim prices up, but relative to its neighbor, there’s a big discount on comparable properties. On HaKnesset Street in the east of the city, a small four-room (three-bedroom) apartment sold at the end of March for NIS 4,080,000 (about $1.15 million). The new first-floor apartment, completed in 2022, measures 94 square meters (1,012 square feet) and includes one parking space.

2. Further away, but still at a reasonably short commuting distance from Tel Aviv,  a four-room (three-bedroom) apartment on Moshe Dayan Street in Holon changed hands for NIS 2,650,000 (about $730,000) in late March. The home measures 95 square meters (1,023 square feet) and was built in 2009. It is on the eighth of 15 floors, with one parking space.

3. On Hativat HaNegev Street in Ashdod, a five-room (four-bedroom) apartment on the edge of the city sold for NIS 2,250,000 (about $620,000) in early March. The apartment is on the second of five floors, in a building completed in 1970, and measures a more spacious 128 square meters (1,378 square feet).

4. For an affordable coastal location not too far from Tel Aviv, in Ashkelon, on Bik’at Rimon Street, NIS 1,700,000 (about $471,000) secured a four-room (three-bedroom) apartment of 92 square meters (990 square feet). The building was built in 2015 and the purchase includes a dedicated parking space.

5. Premium-priced luxury apartments dominate sales in Jerusalem. But moving out to what is effectively a city suburb, in Mevasseret Zion, a four-room (three-bedroom) new apartment due for completion next year sold for about NIS 3,400,000 (about $950,000) in later March. The apartment is on the ground floor and comes with a small yard of 27 square meters (291 square feet) and a living area of 124 square meters (1,335 square feet).

6. On HaTiltan Street in Ma’ale Adumim in the West Bank (also close to Jerusalem, but considerably cheaper), a four-room (three-bedroom) apartment built in 1994 changed hands for NIS 1,810,000 (roughly $496,000) in mid-March. The apartment covers 80 square meters (860 square meters) in size, and is located on the second of two floors in a building of six apartments in total.

7. Further out, but within a reasonable distance of both Jerusalem and Tel Aviv, a large four-room (three-bedroom) apartment in Modiin sold in mid-March for NIS 3,350,000 (about $914,000). The apartment was built in 2005 and offers 132 square meters (1,421 square feet) of space on Sara Imeinu Street, together with two reserved parking spaces.

8. Heading north from Netanya, in the center of the country, on Milkhemet Sheshet ha-Yamim Street in Hadera, a five-room (four-bedroom) apartment changed hands at the end of March for NIS 1,800,000 (about $502,000). It is on the first of six floors with 149 square meters (1604 square feet) of living accommodation, in a building constructed in 1987.

9. On HaRav Malul Street in Or Akiva in northern Israel, a four-room (three-bedroom) apartment sold in recent weeks for NIS 2,120,000 (about $578,000). It was built in 2012, with 118 square meters (1,270 square feet) of space and a dedicated parking spot.

10. Outside Haifa, in Kiryat Motzkin, on Yavne Street, a small four-room (three-bedroom) apartment with one parking space sold for NIS 1,210,000 (roughly $340,000) in March. The building dates from 1960, while the apartment is 85 square meters (915 square meters) in size.

11. In Carmiel, on Hativat HaYiftach Street, a five-room (four-bedroom) apartment sold for NIS 2,060,000 ($573,018) in early March. The apartment covers 140 square meters (1,507 square feet) of living space, on the top floor of five in a building completed in 2012.

12. Further away from Israel’s major cities, in Katzrin in the Golan region, a five-room (four-bedroom) apartment on Zavitan Street sold for NIS 1,600,000 ($440,000) in early March. The first-floor apartment was built in 1993 in a two-story building and measures 139 square meters (1,496 square feet).

13. Looking to the south, and avoiding larger cities, prices fall dramatically. In the second half of March, on Ahavat Tzion Street in Sderot, a 1990-built apartment sold for NIS 960,000 ($265,780). It has five rooms (four bedrooms) on the second of five floors, and covers a total of 111 square meters (1,195 square feet) of space.

14. In Yeruham, also in March, on Tzvi Bornstein Street, a four-room (three-bedroom) apartment of 81 square meters (872 square feet) sold for NIS 545,000 |(about $150,000). The apartment was on the second of four floors in a building of eight apartments dating from 1970.

Rentals

The high prices and high borrowing costs that act as barriers to home ownership in much of the country put pressure on the limited stock of rental apartments available. The result is that rental costs went up and, at least anecdotally, are still rising.

But, once again, a willingness to look outside main cities can deliver substantially more space for a lot less money, as the rental platform Yad2 shows.

In Givatayim, on Shimon Ben T’zvi Street, a four-room (three-bedroom) apartment can be rented for NIS 7,800 ($2,143). This price does not include local taxes, or any furniture, and is for an apartment of just 95 square meters (1,023 square feet), located on the eighth of eight floors.

In Holon, a four-room (three-bedroom) unfurnished apartment of 90 square meters (969 square feet) is available on Zecharia HaRofe Street for a significantly lower NIS 5,100 ($1,400) a month.

On Kramim Street in Mevasseret Zion, a ground-floor apartment of 70 square meters (753 square feet) can be rented for NIS 5,500 ($1,511). It is divided into four rooms (three bedrooms) and comes furnished, with an additional 50 square meters (538 square feet) of private garden space.

In Hadera, a second-floor, four-room (three-bedroom) apartment is advertised for NIS 4,800 ($1,319) a month in rent. The apartment is located on the city’s Jerusalem Street, in a new building, with 100 square meters (1,076 square feet) of space, and reserved parking.

Closer to Haifa, on HaHashmona’im Street in Kiryat Motzkin, a four-room (three-bedroom) unfurnished apartment of 95 square meters (1,023 square feet) on the 11th floor of 15 can be rented for NIS 3,800 ($1,044).