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Expulsion of Israelis affects rental prices in northern Israel – Israel News

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Expulsion of Israelis affects rental prices in northern Israel – Israel News

Is the mass evacuation of Israel’s northern border zone affecting the rental market in the neighboring areas? Our research into the main cities in the north shows that rents there have indeed increased by hundreds of shekels per month. The Knesset Research and Information Center estimates the number of people evacuated from the settlements on the northern border at 68,500. Some of the families are still living in hotels, a small number have bought houses elsewhere, but most are renting.

To rent apartments, the evacuees use the government housing subsidies that have been in place for several months, which amount to NIS 200 per day for an adult and NIS 100 per day for a child. A family of five therefore receives about NIS 20,000 per month. “Until five months ago, everyone lived in hotels. When the government introduced the rental subsidies, people left the hotels, which upset the rental market in the Western Galilee,” says Naty Sheinfeld, who holds an Anglo-Saxon agency license in Karmiel, Ma’a Lot and Kfar Vradim. “They were dazzled by the high amounts, but ignored the fact that the subsidy is intended to cover all housing costs, including living expenses and fixed costs such as municipal taxes, electricity and water,” he adds.

All of those interviewed for this article found contentious the question of the extent to which price increases could be explained by a market responding to a flood of demand and the extent to which this was a matter of exploiting the hardship of evacuees. It must be stressed, however, that the ability of evacuees to absorb rising prices relies on government assistance that is not available to ordinary renters. At some point in the future, this assistance will expire, and that will presumably contribute to some moderation of housing costs.

Upswing in rural areas

“The aid blinded people, and the first to jump on the bandwagon were wasteful and acted rashly,” says Sheinfeld. “Most of the evacuees in the Western Galilee are residents of rural settlements who were looking for similar houses, that is, houses with land. And then suddenly the rents for houses with land in the Western Galilee rose from NIS 6,000-6,500 per month to NIS 8,000-8,500. That sent the entire market into shock, including us real estate people. The rumor that rents were rising also reached the owners of apartments in multi-family buildings, who realized that they were on the right track and began to raise prices.”

But then it turned out that not all of the tenants were evacuees and the market could not afford these prices, says Sheinfeld. “Prices gradually fell to a level that was high compared to the pre-war period, but well below the peaks reached in the first months of the subsidy. Today, rents for these houses with land are around NIS 7,000 per month,” he says.

A person walks near a damaged residential building in Akko, northern Israel, August 25, 2024. (Source: REUTERS/AMMAR AWAD)

The sudden demand that hit the northern rental market also reached the urban market. “We are clearly seeing a revival in settlements that are not on the border fence,” says Michal Korland, franchisee and partner at Re/Max Pioneers in the north. “In other settlements, there is a significant increase in the number of deals, both for home purchases and mainly for rent.” Korland says the market had slowed down a bit in the last tense weeks when a Hezbollah attack was expected. “But in the last few days, it is functioning as before.”

Sheinfeld and Korland say that evacuees try to rent near their homes. For example, evacuated kibbutz and moshav members rent houses with land in Kfar Vradim, a settlement not far from the border but not directly on the fence. People evacuated from Shlomi rent in Nahariya.

“Prices are rising because the market is growing, but we don’t see greed or any attempt by landlords to take advantage of the situation,” Korland says. “Most landlords understand the situation, understand the needs of the evacuees, and some are willing to allow the necessary flexibility in their leases. They too are in a situation of uncertainty about the future, because the war will end and the evacuees will return to their homes, and many homes will be empty.”

Korland says some evacuees are renting apartments in Nahariya that were sold under the government-subsidized “Buyer’s Price” program to young couples who bought them as an investment but have had difficulty renting them out because of the oversupply that has arisen. Rents in Nahariya are currently NIS 3,900 to NIS 4,200 for three-bedroom apartments and NIS 4,500 to NIS 4,800 for four-bedroom apartments. Korland estimates that prices have risen by 7 to 10% since the war began.

Rents rise by 20%

Most of the evacuees from the Galilean Panhandle and Western Galilee appear to be concentrated in Tiberias. Data from the website yad2, sent to us specifically, show that rents for three-bedroom apartments in Tiberias have risen by 17% compared to before the war, and rents for four-bedroom apartments by 7%. “I estimate that rents have risen by at least 20% since the war began,” says Zvi Seroussi of Zvi Realtors. “Apartments that used to rent for NIS 4,000 now cost NIS 5,000, and apartments that used to cost NIS 3,000 now cost almost NIS 4,000.” Seroussi says that part of the increase can be explained by the short-term leases that evacuees sign, but another part is due to landlords taking advantage of the evacuees’ plight.

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Rents are also rising in Afula, especially for furnished apartments, “and unfortunately there are landlords who are taking advantage of the situation,” says real estate agent Maor Shem Tov. “Evicted families mostly prefer large apartments in the new neighborhoods, the Yizre’el and Lev Ha’emek neighborhoods. A four-room apartment that used to cost NIS 3,500 now costs NIS 4,000, and a five-room apartment that used to cost NIS 4,000 now costs NIS 4,500 to NIS 4,800.”

To put things in perspective, the Israel Central Bureau of Statistics’ survey of the rental market found that average rents have risen by 3.5 percent since the war began. The Housing Services Index, which is based on rent changes, has risen by 2 percent during this period, so the figures from the north, particularly Tiberias, are exceptional.



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