Renters to pay dearly
Photo: Hagai Frid
Rent rises by up to 10% nationwide
Rent costs have grown significantly this year due to increasing investment property sales
Rent prices have jumped 2%-10% in cities across the country since the beginning of the year, according to a review conducted by Yedioth Ahronoth's finance section, Mamon.
The hike emanates from an increase in investment property sales, a trend that has diminished the number of homes for rent.
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Finance Minister Yuval Steinitz pledged last year to take drastic measures to deal with the real estate bubble, and announced that tax exemptions on second home sales – second homes are often investment properties – would be annulled by the end of 2012. The announcement prompted investors to flood the market with apartments, creating a shortage in rental properties.
"From the moment that penalties were imposed on investors, it was clear that it's just a matter of time before they leave the real estate market and seek other investment opportunities," Dr. Rina Dagani, CEO of the Geocartography Group, said.
According to Dagani, a recent drop in home purchases has also increased the demand for rentals, consequently raising rent prices.
Engineer and real estate appraiser Gil Vilnes said that he anticipates countless more investment homes to be put on the market by the end of the year.
Mamon's review found that rent prices have risen by 2%-10% in Tel Aviv, depending on the area, while a 8% hike registered in Jerusalem. Beersheba and Haifa saw 7% and 5% increases, respectively.
