he Corona epidemic has had a significant impact on the rental market: decrease in Tel Aviv - 15%

The Corona epidemic has had a significant impact on the rental market in Israel. In Tel Aviv especially. According to data published today by the Bank of Israel, since the beginning of the year there has been a decrease in both demand and level of rent in the center of the country, however, since the middle of April there has been a recovery back to the level of prices a year ago. Tel Aviv's rent fell by about 15%, but in the meantime, it moderated a decline of only an estimated 10%. In other places, there was no decline in rent prices.
According to data from the Bank of Israel, there is a significant increase in apartments for rent in Tel Aviv due to the decrease in demand for AirBNB apartments, which were flowing into the market. "In the four weeks following the application of traffic and employment restrictions in mid-March in most areas, there has been a 30% to 40% decrease in the number of new ads, but in the last two weeks (April 12-25) there is a significant increase in supply," the bank wrote.
"The most notable exception is Tel Aviv - and to a lesser extent also Jerusalem and the Southern region - where supply has already increased in March. This is in contrast to the seasonal pattern where general supply reductions could be expected during this period.
"In Tel Aviv, there has been a sharp increase in the number of new ads, and in aggregate, since the restrictions on traffic have been applied, 67% more rental ads have been published compared to the same period last year. This development supports the expectation of a fall in rental rates in Tel Aviv, "the bank added.
The bank also checked renters sentiment on searches. "The data shows that until the imposition of restrictions on the economy, the development of the index was similar to that of last year.
"However, over the past two weeks the market seems to be recovering. These findings suggest that in recent days the atmosphere of exit from the closure has led tenants to return to look for apartments in light of the gradual opening in the economy," they wrote.
On the price issue, except for the decline in Tel Aviv, prices in Israel remained the same as last year, with some of the areas also having risen prices. "There is no noticeable price development in the various regions, and in some areas the rent demand is even higher than it was last year," the Bank of Israel concluded.
A big question is what will happen to the rent below. On the one hand, the number of dwellings being built is small, and in view of this, the volume of demand for apartments for sale and rent seems to be significantly above the supply of apartments for sale and for rent. This could lead to price increases - both in house prices and in house prices. After all, these are coordinated markets.
However, it is all a question of economic ability. The Corona crisis has caused unemployment to rise noticeably, with expectations that unemployment rates will be 10% -12% and even higher at the end of the year. This means that many renters will not be able to pay the rent, many home buyers will not be able to pay the mortgage. Against this backdrop, there may be pressure to reduce rent.
On the other hand, there will be many who will not be able to afford an apartment and then they will give up on the dream of buying an apartment for rent. As a result, demand for rental apartments will increase, and in this context it is important to emphasize that in the world the rent rate is higher than the rate in Israel.