Israel August Rents Drop 0.8% While Large Apartment Supply Surges
August rental prices in Israel dropped by 0.8% to an average of 5,063 NIS, though rates remain 3.7% higher year-over-year. A surge in large apartment listings drove down prices for 4-5 room units, while small apartment supply shrank.
After months of rising rental prices, August saw a certain moderation: the average rent across the country dropped by 0.8% compared to July. However, compared to last year, tenants are still paying more, with rental prices up 3.7% compared to August 2025. According to WeCheck data, the average rent in August stood at 5,063 NIS, compared to 5,104 NIS in July. Meanwhile, the number of apartments offered for rent nationwide remained almost unchanged at 16,172 apartments, a moderate increase of 0.7% compared to 16,061 apartments the previous month.
Changes in Apartment Mix and Prices
However, the overall figure hides a significant change in the mix of apartments offered for rent: while the supply of large apartments in the market surged, the supply of small apartments contracted. The supply of 4-5 room apartments rose in August by 15.2% within a month, from 5,174 apartments in July to 5,963 apartments. Conversely, the supply of small apartments, consisting of 1-3 rooms, dropped by 6.3% – from 10,893 apartments in July to 10,209 apartments in August.
The data shows that the change in the supply mix was also accompanied by disparities in price trends between small and large apartments. In 1-3 room apartments, August actually recorded a slight monthly increase of 0.2% in average rent, reaching 4,328 NIS. In contrast, for 4-5 room apartments, the average rent dropped by 2.1% and totaled 6,451 NIS.
Expert Insights on the Rental Market
Ronen Ron, CEO of WeCheck, stated: "August presents an interesting picture of the rental market: on the one hand, total supply remains at a relatively high and stable level, and on the other hand, a significant change is taking place within the market itself. The 15% increase in the supply of large apartments versus a 6% decrease in small apartments shows that apartment supply is not a single number, but a mix. The drop in rental prices points to signs of moderation, but it is still too early to talk about a trend reversal: prices are still 3.7% higher than last year, and the annual increase in large apartments is even higher, reaching 4.2%."
"The moderation in rent does not necessarily indicate a drop in rental demand. Tenants may simply prefer to stay in their current apartment and renew their contract rather than move and deal with current market prices," noted Ron Novotny, CEO of Anglo-Saxon and founder of Profoly.
Yaron Rosenbaum, a real estate consultant at RE/MAX WIN Tel Aviv, specializing in downtown properties, added: "In large apartments intended for families, the reinforced security room (MAMAD) has become a threshold condition. Since a significant portion of newer large apartments or urban renewal projects feature a MAMAD, older large apartments without protection stay on the shelf for a long time. This creates an accumulation of unrented supply and forces landlords to compromise and cut prices, which pulls down the average in this segment."
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