Rental Season in Israel: +5.9% for a New Lease

September is approaching, and with it the time of year when the Israeli rental market gets tightest: families moving, students returning, olim setting down their suitcases. For Jewish communities in New York, London, Buenos Aires, Berlin or Moscow, the question arises every summer in one form or another — renting before buying, renting out a property while living elsewhere, or simply knowing what a roof over one's head really costs in Israel today.

The latest data from the Central Bureau of Statistics (CBS) provides a precise answer. And it contains a gap that few have noticed.

2.2% or 5.9%: it all depends on whether you stay

Here is the figure that sums up the Israeli rental market in 2026. In April, tenants who renewed their lease saw their rent increase by 2.2%. Those who signed a new lease paid 5.9% more than the previous occupant.

Almost a four-point gap between staying and moving in. In practice, the Israeli market penalizes the newcomer and relatively protects those already settled. For an oleh arriving this fall, for a student looking for a room in Jerusalem, or for a family scouting before buying, this is a figure to factor into the budget right now.

For a non-resident landlord renting out a property from abroad, the reading is the opposite: every tenant turnover is now worth nearly three additional percentage points of rent. This explains why so many Israeli landlords no longer fight to keep an outgoing tenant.

The national average: 5,027 NIS per month

In the first quarter of 2026, the national average rent stood at 5,027 NIS per month, or about 1,698 USD (at the rate of 2.96 NIS to 1 USD recorded in mid-August 2026). That's +0.7% quarter-on-quarter and +3.5% year-on-year according to the CBS — Bank Hapoalim economists, for their part, put the annual pace closer to 4.4%.

This increase is explained less by the strength of the market than by its paralysis on the buying side. Licensed real estate expert Shmulik Cohen puts it bluntly in Ynet: when purchases decline, would-be buyers don't disappear — they stay renters. Add to this a structural factor: urban renewal accounts for about 20% of housing starts in Israel, and every project launched sends dozens of families onto the rental market for three to four years.

The rent map, district by district

Regional differences are considerable. Average monthly rents in the first quarter of 2026:

• Northern District : 3,232 NIS (1,092 USD)

• Southern District : 3,632 NIS (1,227 USD)

• Haifa District : 3,665 NIS (1,238 USD)

• Jerusalem District : 5,232 NIS (1,768 USD)

• Central District : 5,386 NIS (1,820 USD)

• Tel Aviv District : 6,338 NIS (2,141 USD)

A home in the North therefore costs nearly half as much to rent as one in the Tel Aviv area. It's the sharpest gap in the country.

City by city: the five most expensive, the four most affordable

Topping the ranking, Tel Aviv at 7,351 NIS (2,484 USD), up 3.2% year-on-year. Next come Herzliya at 6,647 NIS (2,246 USD, +3.4%), Kfar Saba at 6,054 NIS (2,045 USD, with growth of nearly 6% — the strongest among major cities), Ramat Gan at 5,826 NIS (1,968 USD, +3.7%) and Jerusalem at 5,280 NIS (1,784 USD, +3.3%).

The middle of the ranking will interest diaspora buyers: Rishon LeZion 5,184 NIS, Petah Tikva 5,051 NIS, Beit Shemesh 4,782 NIS, Netanya 4,729 NIS, Ashdod 4,402 NIS, Bat Yam 4,348 NIS.

Among major cities, four remain below the 4,000 NIS mark: Beer Sheva (3,131 NIS / 1,058 USD), Haifa (3,384 NIS / 1,143 USD), Ashkelon (3,638 NIS / 1,229 USD) and Hadera (3,978 NIS / 1,344 USD).

The extremes of the market: 4.5 to 6-room apartments in Tel Aviv reach 11,220 NIS per month (3,791 USD), while studios and 2-room units in Beer Sheva rent for an average of 2,281 NIS (771 USD). A fivefold difference between the two ends of the country.

Meanwhile, sale prices have stopped falling

The context changed two days ago. On August 14, the CBS published its bimonthly report for May-June 2026 : housing prices rose by 0.1% over the period, and the annual decline is now limited to 1.5%.

This is a notable shift. The previous report, covering April-May, showed a 1% drop over two months — the steepest in eight years — and an annual decline of 2%. In other words: Israel's price correction appears to be pausing at the very moment rents keep climbing.

The regional breakdown is instructive. Over twelve months, two districts are up: Jerusalem (+1.8%) and the North (+1.6%). The Haifa district is down 1.8%. The national picture thus masks markets moving in different directions.

What this changes in practice

If you're arriving in Israel this fall, know that you're entering at the worst time of year and in the most expensive segment (new lease, +5.9%). Negotiating a two-year lease rather than a one-year one protects you from a second increase in 2027.

If you already own a property you rent out from abroad, the annual revaluation is justified by the public data — but a reliable tenant who has paid on time for three years is often worth more than an extra 200 NIS a month, especially when managing remotely.

If you're considering buying to rent out, keep three realities in mind. Purchase tax applies at the investor rate from the very first shekel for a non-resident, unless they become an Israeli resident within two years of the acquisition. Israeli banks rarely lend beyond 50% of a property's value to a non-resident. Finally, between gross and net yield, you must factor in arnona, vaad bayit, insurance and management fees. The details of these mechanisms are covered in our Ultimate Guide to Real Estate in Israel.

A tension that won't ease on its own

Bernard Raskin, head of RE/MAX Israel, sums up the equation: the only way to bring rents down is to increase the stock of housing available for rent. Yet housing starts aren't keeping pace.

The Bank of Israel cut its key interest rate to 3.5% in July 2026. When credit becomes accessible again to Israeli households, some forced renters will become buyers again and rental pressure will ease. That day hasn't come yet. Until then, the 2026 rental season will play out in a market where whoever moves in pays the highest price.

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