Global Property Guide

Financial Information for Residential Property Buyers


Property in Tel Aviv is very expensive, and rental yields are poor

Last Updated: August 18, 2016

Last Updated: Nov. 02, 2017
TEL AVIV - YAFO Apartments PRICE/SQ.M. (US$) YIELD (p.a.) PRICE/SQ.FT. (US$)
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
Bavli 10,978 n.a. n.a. 1,020 n.a.
Ben-Yehuda 13,803 26.64 2.32% 1,282 2.47
City Center 15,005 57.25 4.58% 1,394 5.32
Dizengof 14,165 n.a. n.a. 1,316 n.a.
Kikar Hamedina 13,551 28.34 2.51% 1,259 2.63
Neve Tsedek 17,149 38.26 2.68% 1,593 3.55
Ramat Aviv 11,253 35.99 3.84% 1,045 3.34
Rothschild 17,098 43.93 3.08% 1,588 4.08
Shenkin 21,365 30.32 1.70% 1,985 2.82
JERUSALEM - apartments
Abu Tor 12,570 19.56 1.87% 1,168 1.82
Arnona 7,967 16.72 2.52% 740 1.55
Baka 10,083 22.39 2.66% 937 2.08
City Center 11,265 26.64 2.84% 1,047 2.47
German Colony 13,993 22.67 1.94% 1,300 2.11
Mamilla 15,722 34.01 2.60% 1,461 3.16
Nahlaot 11,116 23.52 2.54% 1,033 2.19
Rehavia 10,187 25.51 3.00% 946 2.37
Talbieh 13,303 34.58 3.12% 1,236 3.21
All yields are gross - i.e., before taxes, repair costs, ground rents, estate agents fees, and any other costs. Net yields (what you'll really earn) are typically around 1.5% to 2% lower.
Source: www.immobilier.co.il Definitions: Data FAQ See also: Update Schedule

Gross rental yields i.e., the rental return on a property if fully rented out, before all expenses, are poor in Tel Aviv and Jerusalem - almost at Monaco-like levels. Gross rental yields for apartments are near or under 3% (though some areas have higher yields).

This tends to support the popular view that property is somewhat overpriced in Israel.

Tel Aviv is a more expensive city to buy or rent property in generally than Jerusalem. In both cities prices have risen strikingly in the past few years. Prices in Tel Aviv range from US$10,000 to US$21,000 per square metre (sq. m.), whereas four years ago, we found the cost of a 120 sq. m. apartment to be typically around US$ 7,800 per sq. m.

These are the sort of prices that can be seen in Swiss cities of Geneva and Zurich, or in Canada's Toronto and Vancouver.

Renting an apartment in Tel Aviv would cost you anywhere from US$27 per sq. m. to US57 per sq. m. per month. Renting in Jerusalem is likely to cost you US$19 to US$35 per sq. m. per month.

Despite Tel Aviv's higher purchasing price, it generally generates higher yields. The City Center (4.58%) and Ramat Aviv (3.84%) are the best-yielding areas in Tel Aviv. In Jerusalem, it is Rehavia (3%) and the City Center (2.84%).

Round trip transaction costs are low to moderate on residential property in Israel, with most costs paid by the buyer. See our Israel residential property transaction costs analysis and Round-trip transaction costs in Israel compared to the continent

Comments

Gil | August 07, 2010

The price above per sq. m is very general... because the prices for renovated apartments in Tel Aviv is much higher than that maybe double more like $9,204.99 per sq m. at least that is the deal I am signing tomorrow. Check out www.bartenura15.com for further information.

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