The Bank of Israel research department today published its first analysis of the residential rental market during the Covid-19 crisis. The analysis indicates a significant fall in demand since the start of April and a recovery in the second half of the month. So far, no fall is evident in the rents being asked for apartments, except in Tel Aviv, where rents have fallen 15%.
Analysis of new advertisements for apartments to rent on websites reveals that in the four weeks after restrictions on movement and employment were imposed in mid-March, there was a 30%-40% fall in the number of new advertisements in most parts of Israel. In the past two weeks (April 12-25) there has been a major increase in supply.
Tel Aviv is exceptional because the supply of apartments to rent began in March. This is in contrast to the seasonal trend when usually an overall fall in supply of apartments in Tel Aviv can be expected. Since restrictions on movement were imposed, there was a rise of 67% in ads for apartments to rent in Tel Aviv compared with the corresponding period last year. This probably reflects the large number of apartments that had previously been advertised on Airbnb for short term rentals for tourists, who are currently barred from entering the country.
In terms of demand to rent apartments, since mid-March there has been a 50% fall in demand compared with the corresponding period of 2019. However, in the past two weeks it seems that the market is recovering. These findings suggest that in recent days with the atmosphere that the lockdown is ending, renters are returning to the marking and looking for apartments as the economy gradually reopens.
An analysis of prices of 2.5-three room apartments in various regions found that with the exception of Tel Aviv, there was no substantial fall in rental prices in the rest of the country and there were even some locations where rentals rose from the corresponding period of 2019.
In Tel Aviv, rents fell sharply by about 15%, although from a very high starting point. In recent weeks, rents being demanded have returned to similar levels to last year. But this could be that in the absence of tourists, high-standard Airbnb apartments in Tel Aviv, and to some extent also in Jerusalem, have now been put on the longer term market at relatively high rents because of their quality.
Published by Globes, Israel business news - www.globes-online.com - on May 3, 2020
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