While home prices in Israel have been declining for several months, rental rates have continued to climb. However, just ahead of the Central Bureau of Statistics’ upcoming release of its rental index, analysts say the market may be showing the first signs of a shift.
An analysis of rental data for August 2025, conducted by Differant, a company that provides rental protection for landlords, for ynet, shows a national decline of approximately 4 percent compared with July, from an average of 5,433 shekels per month in July to 5,195 shekels in August. Compared with the same month last year, rents have still increased by about 4 percent annually.
In Tel Aviv, four-room apartments rented for 9,221 shekels, a 7 percent drop from July. One-room apartments were rented for 4,034 shekels, down 2 percent, while two-room units rose 3 percent to 6,259 shekels.
In Ramat Gan, two-room apartments rented for 4,754 shekels in August, up 1 percent from July, while four-room units increased 4 percent to 7,509 shekels. In Bat Yam, two-room apartments rose 3 percent to 4,234 shekels, while four-room apartments fell 2 percent to 6,505 shekels.
Shmulik Cohen, a real estate appraiser and CEO of SK Appraisal, cautioned that the preliminary data should be interpreted carefully. He said the average price drop in August may reflect a temporary spike in July when thousands of residents displaced from buildings damaged by rocket attacks rented apartments with government support. “That created a localized rise in prices that can influence the August average compared with July,” he said.
The analysis also included cities that did not experience evacuations. In Givatayim, two-room apartments rented for 5,024 shekels in August, down 3 percent from July, and four-room units fell 6 percent to 7,290 shekels. In Rishon Lezion, four-room apartments went for 6,478 shekels, a 1 percent drop. In Harish, four-room apartments were rented for 4,008 shekels, down 6 percent, and five-room apartments for 4,718 shekels, down 3 percent. In Haifa, four-room apartments fell 6 percent to 4,454 shekels, and five-room units dropped 5 percent to 5,964 shekels.
Shmulik CohenIn Be’er Sheva, four-room apartments rented for 3,821 shekels, down 3 percent, five-room apartments for 5,276 shekels, down 4 percent, and six-room units saw a sharp 12 percent drop to 5,662 shekels. In Jerusalem, two-room apartments fell 6 percent to 4,291 shekels, four-room units rose 2 percent to 7,457 shekels, while five-room apartments dropped 13 percent to 8,716 shekels.
Aviv Segron, marketing vice president at Differant, said that the national supply of rental apartments in August stood at 15,544 units, a 16 percent monthly decline. “We are in the middle of the seasonal relocation period, when tenants move due to studies, expired contracts, or changes in work or children’s schooling,” he said.
Segron said that under normal circumstances, higher supply comes with higher demand, which pushes rents up. “But against the backdrop of the ongoing war over the past two years, rising living costs, waves of layoffs, and soaring inflation, not only are home prices falling, but rental prices are beginning to show early signs of stabilization or decline,” he said.
He added that apartments are remaining on the market without tenants in many cities for at least three months, particularly units without reinforced security rooms, even in high-demand areas in central Israel. “Even moving companies report the market is stuck, and landlords we insure prefer not to raise rents just to keep tenants,” he said.
Aviv SegronYaniv Bernstein, another Differant executive, said tenants are increasingly demanding apartments with reinforced security rooms, known as Mamads. “This explains why traditional rental cities are seeing price drops due to a lack of Mamads. Cities without price declines include Beit Shemesh, where new neighborhoods with Mamads are under construction, as well as Ashdod, Ashkelon, and Afula, which also have new housing developments, including under the government’s subsidized housing program,” he said.
On the ground, however, some experts say changes are not yet clear, particularly in Tel Aviv. Shirley Werner, franchisee of RE/MAX Ocean and owner of three RE/MAX offices in the city, said the Tel Aviv rental market has always fluctuated, with some areas rising and others falling. “According to our data, there is no clear overall trend of increases or decreases. Overall, rents in Tel Aviv remain fairly stable, and any change is usually isolated, reflecting a specific apartment, unique property, or an area affected by the war that generates higher demand,” she said.
Werner added that price drops also occur for properties initially priced too high. Most landlords stick to previous price levels, and strong demand in Tel Aviv continues to support this stability. She noted a growing demand for apartments with Mamads or shelters, which can influence prices depending on factors like floor, proximity to public shelters, and nearby kindergartens.
Cohen said that looking at city-wide averages can be misleading. “In cities like Tel Aviv, which show average price declines, it is better to examine neighborhoods or specific areas rather than the overall city average. Average declines may reflect more transactions in cheaper areas. Meanwhile, neighborhoods undergoing large-scale redevelopment may see localized price increases during evacuation periods, which affects the overall city average,” he said.
He also said that apartment features strongly influence prices, especially now. “Units without Mamads are likely to rent for lower prices at this time. Seasonal factors also play a role: in August, families and students increase demand in certain cities, like Be’er Sheva, which can push prices up,” he said.