Rental Prices in Israel Rise as Home Prices Fall

Despite declining home prices, rental prices in Israel continue to climb — and one city stands out above the rest. The average rent for an apartment in Israel rose by 4.4% over the past year, with the sharpest annual increase for 4-room apartments recorded in Beit Shemesh at 8.3%. Tel Aviv, in contrast, saw more moderate rises.

By Doron Breutman, Nadlan Center

The average rental price for an apartment in Israel in Q3 2025 reached 4,952 shekels — a 1.5% increase from the previous quarter and 4.4% higher than the same period last year, according to data published last Friday by the Central Bureau of Statistics (CBS) alongside the Consumer Price Index and the Housing Price Index. This trend runs opposite to the market for homes for sale, where average prices fell 2.5% year-over-year.

A breakdown by apartment size shows that the average rent for a 1–2 room apartment in Q3 stood at 3,758 shekels (up 3.4% year-over-year). A 2.5–3 room apartment averaged 4,405 shekels (up 4%), a 3.5–4 room apartment averaged 5,400 shekels (up 3.7%), and rental prices for 4.5–6 room apartments reached 7,005 shekels (up 4.8%).

A city-by-city breakdown (for cities with populations above 100,000) reveals that Tel Aviv still has the highest rental prices in the country: the average rent for a 3-room apartment is 7,004 shekels (up 1.5% annually), and a 4-room apartment averages 8,739 shekels (up 2.5%). In Jerusalem, rental prices for 3-room apartments rose sharply by 3.9% to 4,748 shekels, while 4-room apartments averaged 6,018 shekels — up a more moderate 1.7%.

In Haifa and Be’er Sheva, rental prices also increased. In Haifa, the average rent for a 3-room apartment reached 3,082 shekels (up 4.3% year-over-year) and 3,937 shekels for a 4-room apartment (up 3.1%). In Be’er Sheva, the average rent for a 3-room apartment rose 3.1% to 2,753 shekels, while a 4-room apartment averaged 3,385 shekels — up 2.2%.

Beit Shemesh Leads in Sharpest Increases

Rental prices for 4-room apartments rose in every city surveyed, with increases ranging between 1.6% and 8.3% year-over-year. Leading the list is Beit Shemesh, where the average 4-room rent jumped 8.3% to 4,695 shekels. Significant annual increases were also seen in Hadera, where 4-room rents rose 4.5% to 4,273 shekels, and in Kfar Saba, where rents increased 5.8% to 5,939 shekels. In absolute terms, high rental prices for 4-room apartments were recorded in Ramat Gan (6,642 shekels) and Herzliya (6,886 shekels).

A regional breakdown shows that the lowest average rental prices for 4-room apartments in Q3 were in the Northern District at 3,432 shekels (up 3.7% year-over-year). Relatively low prices were also found in Haifa and the South: Haifa averaged 3,981 shekels (up 4.6%), and the South averaged 3,928 shekels (up 3.1%).

Meanwhile, the Central District saw significantly higher rental prices, with the average 4-room rent reaching 5,479 shekels (up 4.1%). The Tel Aviv District recorded an even higher average of 7,096 shekels (up 3.1%). In the Jerusalem District, the average rent for a 4-room apartment stood at 5,860 shekels — a 2.7% increase.