During a discussion held by the Knesset’s Young Adults Committee, data revealed that rental prices have surged by 57% over the past two decades. However, the proportion of income spent on housing has remained relatively stable. In Jerusalem, young adults spend nearly 60% of their income on housing, compared to just over 30% in the country’s north.
By Dror Nir Kastel, Nadlan Center
According to a study by Liran Kosman, a researcher in the Knesset‘s Budget Control Department, about 25% of individuals aged 25-34 live with their parents. In a session dedicated to rental challenges facing young adults, Kosman stated that approximately 65% of people in this age group live with their own families, around 9% live in shared households (e.g., roommates), and only 15% own their own homes.
Government assistance with rent is mainly provided to new immigrants and low-income individuals. Data also shows that young people spend 42% of their total income on rent, compared to 28% among older populations.
Over the past two decades, monthly housing expenses for renters have risen, but the percentage of household income spent on housing has remained stable at around 35%. Twenty years ago, the average monthly rent was approximately 3,500 NIS, now exceeding 5,500 NIS—a 57% increase.
Kosman noted significant disparities in the proportion of income spent on rent between young and older households. There are also regional differences: in Jerusalem, young adults spend almost 60% of their income on housing, while in the northern regions, the proportion is slightly over 30%.
Yaron Hoffman-Dishon, a researcher at the Adva Center, argued during the discussion that housing policy has shifted from government control to the private market. This shift is evidenced by a gradual reduction in the Ministry of Construction and Housing budget, a sharp decrease in funding for subsidized mortgages, a decline in rental assistance, and neglect of public housing. Meanwhile, the state benefits from rising real estate revenues, exacerbating social inequalities, with young couples feeling the brunt of these policies and being forced to remain in the rental market. According to him, young couples spend an average of 27.3% of their net monthly income on rent, with Tel Aviv residents spending nearly 39.8% and Be’er Sheva residents spending just 17%.
Hoffman-Dishon called for increased state involvement in the private rental market, including mechanisms to stabilize rental housing, prevent discrimination in rental agreements, and limit arbitrary rent increases—similar to systems in many European countries. He also urged increasing funds allocated for subsidized mortgages and updating rental assistance amounts in line with market rates.
Committee Chair MK Naama Lazimi (Labor) emphasized that the rental market is one of the most significant challenges for young people and young families in Israel today. “Rising housing prices make it difficult for many to fulfill the dream of owning a home, and the percentage of renters continues to grow. Data shows that over the past decade, the rental index has risen by about 61%, with young people spending an average of 42% of their income on rent—creating an economically challenging reality that hinders their ability to achieve financial stability and a sense of security.”
