Rental market splits: surge in small apartments amid shortage of large ones
July data reveals significant supply gaps: while small apartment availability has recovered, a 25% shortage in large units persists, driving a 4.8% annual price increase.
The supply of apartments for rent rose in July by 2.5% compared to June, reaching 16,061 units. This increase was driven almost entirely by 1–3-room apartments, which saw a 14.4% jump in supply. Conversely, the supply of 4 and 5-room apartments fell by 15.9%. Compared to July of last year, the supply of large apartments is 25% lower, while the supply of small apartments has returned to levels seen a year ago. Rental prices remained unchanged from June, but are 4.8% higher compared to July 2025. Jerusalem led with a 48.3% monthly surge in supply, followed by Tel Aviv with a 20.3% increase.
The rental market continues its summer recovery, but the headline growth masks a significant divide between small and large units. Data from WeCheck for July 2026 indicates that while total supply grew by 2.5%, the large apartment segment experienced a sharp decline.
The supply of 1–3-room apartments jumped by 14.4% in July, returning to levels similar to last year—specifically 0.6% higher than in July 2025. In contrast, the supply of 4 and 5-room apartments dropped by 15.9% over the month and is now 25% lower than in July of last year.
Regional disparities are also notable. Jerusalem led the supply growth with a 48.3% jump, followed by Tel Aviv (20.3%), Netanya (8%), Ramat Gan (7.7%), and Rishon LeZion (6.9%). Conversely, Ashkelon saw a 26.1% decline, and Ashdod experienced a 6.1% drop.
National rental prices remained stable between June and July. No price changes were recorded for 4–5-room apartments, while small 1–3-room units saw a modest 0.2% decrease. However, on an annual basis, national rental prices in July were 4.8% higher than in July 2025. Prices for 1–3-room apartments rose by 3.1% annually, while 4–5-room apartments saw a 4.8% increase. Jerusalem, Netanya, and Petah Tikva stand out for their price hikes.
The company notes that annual comparisons should be viewed with caution due to the exceptional events of June 2025 during Operation Im Khavia, which were followed by a sharp recovery in supply in July of that year.
Rami Ronen, CEO of WeCheck, highlighted the risks in the large apartment market:
"Yes, the general supply has risen and rental prices are stable, but behind the encouraging headline hides a trend that worries us: the supply of large apartments is in a 25% shortage compared to last year, and this gap is not closing—it is widening."
According to Ronen, families seeking 4–5-room apartments are facing a shrinking market, which is directly fueling the nearly 5% annual price increase in this segment. He added: "The seasonal recovery in small apartments is good news, but it is no substitute for solving the structural shortage of large apartments, without which many families will find themselves without a proper solution."
