"Rental Apartment Demand Skyrockets with a 3.4% Annual Growth in 2013-2022 Outpacing Overall Growth

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by Ifi Reporter Category:Real Estate Aug 7, 2023

The Central Bureau of Statistics in Israel has released a comprehensive report on the housing landscape in the country over the past ten years, shedding light on ownership, rental, and sheltered housing segments. The data was sourced from the register of apartments and buildings, using property tax data provided by local authorities.

As of July 2022, Israel boasts approximately 2.85 million apartments and residential housing units. Among these, 71.3%, or around 2.03 million units, are privately owned apartments. Rented apartments account for 28.1%, with about 803 thousand units, while there are approximately 17 thousand apartments in private sheltered housing, making up 0.6% of the total.

The average annual growth rate for rental apartments from 2013 to 2022 was 3.4%, surpassing the average annual growth rate for all apartments, which stood at 1.9% during the same period.

Of the apartments for rent, 77.9% are rented by private individuals, 7.3% by public housing companies, 5.2% by companies, 5.0% by kibbutzim and moshavim, and 1.4% by other parties, with 3.2% of the rental arrangements being unknown.

Regionally, the Tel Aviv District exhibits the highest percentage of apartments for rent, at 38.9%, while the North District shows the lowest, with 19.9%.

Notable cities with a significant proportion of rental apartments include Tel Aviv-Yafo (49.7%), Harish (45.4%), and Givatayim (40.2%). Remarkably, in 2022, the number of apartments for rent in Tel Aviv-Yafo has matched the number of privately owned apartments in the city.

In 2022, the count of apartments in public housing was 61.1 thousand (47.6 thousand apartments and an additional 13.5 thousand apartments in public sheltered housing), compared to 67.1 thousand in 2013 (56.5 thousand apartments and an extra 10.6 thousand apartments in public sheltered housing). Over the past decade, approximately a thousand apartments were removed from the public housing stock on average each year. More than half of the public housing is concentrated in the southern district (36.2%) and the northern district (19.4%).

The report also highlights a 15% turnover rate of tenants in rented apartments during 2021-2022. Cities such as Haifa, Be'er Sheva, and Tel Aviv-Jaffa experienced relatively high proportions of apartments with tenant changes.

Additionally, when analyzing cities with populations of 100 thousand or more, buildings with 11-20 apartments exhibited the highest rental percentage at 35.2%, compared to only 14.6% in small buildings with 1-2 apartments.

Ownership patterns revealed that 29.4% of apartments owned by Jews are rented, while the figure stands at 11.8% for apartments owned by Arabs. However, a significant 62.2% of apartments owned by others are rented out.

Moreover, the data reveals a correlation between age groups and apartment ownership. As the age group increases, the proportion of apartment owners rises, while the share of apartments owned for rental purposes declines.

In a regional comparison, it was observed that, in 2021, the percentage of apartments for rent in Israel was 27.4%, slightly below the average of 30.1% in EU countries.

The findings from this comprehensive report provide valuable insights into the housing dynamics in Israel and will be crucial in guiding policymakers and stakeholders in addressing housing challenges and planning for the future.

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