Moving to a new apartment? Rent is significantly higher for those changing address
Tenants who moved to a different apartment paid on average 6.6% more than previous occupants, compared to a 2.6% increase upon contract renewal. This gap makes moving particularly expensive and strengthens the landlord's position during tenant turnover.
Tenants who moved to a different apartment paid on average 6.6% more than previous occupants, compared to a 2.6% increase upon contract renewal. This gap makes moving particularly expensive and strengthens the landlord's position during tenant turnover.
Tenants approaching the end of their contract may find that moving to a new apartment is much more costly than renewing their existing agreement. Data from the Central Bureau of Statistics indicates that in apartments where the tenant changed, an estimated annual rent increase of 6.6% was recorded. Among tenants who renewed their lease, the increase stood at 2.6%.
The financial impact accumulates rapidly. A monthly rent of 5,000 shekels may rise to about 5,130 shekels upon renewal, compared to about 5,330 shekels for a new tenant. For an apartment rented at 8,000 shekels, the gap between the two scenarios reaches approximately 320 shekels per month, or 3,840 shekels per year.
Added to this are the costs of the move itself: brokerage fees, moving services, apartment adjustments, furniture purchases, security deposits, and work days lost to packing and settling in. A tenant seeking to save a few hundred shekels a month may find that the move only pays off economically after a long period.
Why do landlords demand more when tenants change?
When renewing a contract, both parties are familiar with each other. The landlord knows how the property was maintained, if payments were timely, and the likelihood of future issues. Changing a tenant involves advertising, apartment viewings, background checks, potential vacancy periods, and the risk of choosing an unreliable new tenant. Therefore, many landlords prefer a moderate increase to maintain a stable tenancy.
During turnover, landlords have the opportunity to adjust prices to current market demand, especially in areas with limited supply. Apartments with a MAMAD (protected space), elevator, parking, balcony, or proximity to employment centers are in higher demand, and the price gap between these and older apartments can reach hundreds or even thousands of shekels per month.
The average rent in Israel is approaching 5,000 shekels per month, though this national average hides wide disparities between cities, neighborhoods, and apartment sizes. Prices are significantly higher in the center of the country, while family apartments can be found at lower prices in the North and South.
To check prices using the Bizportal rent database for central cities, click here.
Tenants receiving a rent hike demand should research similar apartments in the area, how long they have been on the market, and the expenses associated with moving. This data allows for evidence-based negotiations and highlights the benefit of maintaining a stable contract. Landlords also have an interest in keeping reliable tenants, especially when a sharp increase could lead to a vacant month that wipes out a significant portion of the additional income.
The article was originally published on Bizportal: Is your rental contract ending? Prepare to pay more.
