Authored by the expert who managed and guided the team behind the Israel Property Pack
Yes, the analysis of Tel Aviv's property market is included in our pack
Tel Aviv property prices have reached historically unprecedented levels, making it one of the world's most expensive real estate markets. As of September 2025, central Tel Aviv apartments average ₪68,000-69,000 per square meter ($18,000-$18,500), with luxury properties commanding significantly higher prices.
The Tel Aviv residential market has experienced dramatic price growth over the past five years, with increases of approximately 100% - among the sharpest in the OECD. This surge has created significant affordability challenges, with median home prices now 15-18 times average household income, placing Tel Aviv among the world's least affordable cities for property ownership.
If you want to go deeper, you can check our pack of documents related to the real estate market in Israel, based on reliable facts and data, not opinions or rumors.
Tel Aviv currently has the highest property prices in Israel, with central apartments averaging ₪68,000-69,000 per square meter, significantly outpacing other Israeli cities like Jerusalem (₪32,200), Haifa (₪17,400), and Herzliya (₪34,000-35,000).
The market shows clear signs of overvaluation relative to local incomes, with rental yields of only 2.5-3.5% and ownership rates below 40%, making Tel Aviv properties extremely expensive by both local and international standards.
| City | Average Price per sqm (₪) | Average Price per sqm (USD) |
|---|---|---|
| Tel Aviv (Central) | 68,000-69,000 | $18,000-$18,500 |
| Jerusalem | 32,200 | $8,500-$11,000 |
| Haifa | 17,400 | $4,500-$5,000 |
| Herzliya | 34,000-35,000 | $9,450 |
| Tel Aviv (Outer Areas) | 30,000-45,000 | $8,000-$12,000 |
| Tel Aviv (Luxury) | Up to 150,000 | Up to $40,000 |
What is the current average price per square meter for apartments in Tel Aviv?
Tel Aviv apartments currently average ₪68,000-69,000 per square meter in central neighborhoods, equivalent to approximately $18,000-$18,500 per square meter as of September 2025.
Prime luxury locations like Rothschild Boulevard and Neve Tzedek command significantly higher prices, with some properties reaching up to ₪150,000 per square meter. These premium areas represent the most expensive residential real estate in Israel.
Outer areas of Tel Aviv offer more affordable options, with prices ranging from ₪30,000-45,000 per square meter in neighborhoods located further from the city center. However, even these "budget" areas remain expensive compared to other Israeli cities.
The price variation within Tel Aviv is substantial, reflecting the city's diverse neighborhoods and proximity to business districts, beaches, and cultural centers.
How do Tel Aviv prices compare to other major Israeli cities?
Tel Aviv has the highest residential property prices in Israel, significantly outpacing all other major cities.
Jerusalem averages approximately ₪32,200 per square meter, making it roughly half the price of central Tel Aviv. Haifa offers the most affordable major city option at around ₪17,400-18,000 per square meter.
Herzliya, often considered Tel Aviv's upscale northern neighbor, averages ₪34,000-35,000 per square meter, still substantially lower than Tel Aviv's central areas. The price gap between Tel Aviv and other Israeli cities has widened considerably over recent years.
This pricing hierarchy reflects Tel Aviv's status as Israel's financial and tech hub, combined with limited land availability and high demand from both domestic and international buyers.
| City | Average Price (₪/sqm) | Price Difference vs Tel Aviv |
|---|---|---|
| Tel Aviv | 68,000-69,000 | Baseline |
| Herzliya | 34,000-35,000 | 50% lower |
| Jerusalem | 32,200 | 53% lower |
| Haifa | 17,400 | 75% lower |
| Tel Aviv (Outer) | 30,000-45,000 | 35-56% lower |
What has been the price growth trend over the past 12-24 months?
Tel Aviv real estate experienced exceptional price growth over the past two years, contributing to a five-year increase of approximately 100% - one of the sharpest rises among OECD countries.
During the past 12-24 months, the market showed continued strength despite some volatility. A minor price dip of roughly 3.3% occurred in Q2 2025, but the market quickly recovered and resumed its upward trajectory.
The growth has been driven by sustained demand, limited new supply, ongoing population growth, and Tel Aviv's strengthening position as a regional tech and financial center. Demographic trends and urbanization continue to fuel demand pressure.
Market experts note that while growth rates have been extraordinary, concerns about sustainability are growing given the widening gap between property prices and local incomes.
It's something we develop in our Israel property pack.
Are there price differences between central and outer Tel Aviv neighborhoods?
Significant price disparities exist between Tel Aviv's central and outer neighborhoods, with central areas commanding premium prices.
Central neighborhoods like Rothschild, Neve Tzedek, and Florentin see mainstream properties trading around ₪68,000-70,000 per square meter, with luxury developments reaching ₪150,000 per square meter. These areas benefit from proximity to business districts, cultural attractions, and nightlife.
Outer neighborhoods in south and east Tel Aviv offer more affordable options at ₪30,000-50,000 per square meter. These areas are experiencing gentrification and infrastructure improvements, making them attractive to younger buyers and investors seeking growth potential.
The price gradient reflects accessibility to city center amenities, transportation links, and neighborhood character. Even outer areas remain expensive by national standards, highlighting Tel Aviv's overall premium positioning.
Don't lose money on your property in Tel Aviv
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
What are the average rental prices and yields in Tel Aviv?
Tel Aviv rental prices average around ₪100 per square meter per month (approximately $27), with typical 3-room apartments renting for ₪9,000-11,000 monthly.
Gross rental yields in Tel Aviv typically range from 2.5-3.5%, significantly lower than yields available in Jerusalem and Haifa due to higher capital costs. Prime central locations often deliver even lower yields, sometimes below 2.5%.
The low rental yields reflect the significant premium investors pay for Tel Aviv properties compared to rental income potential. This yield compression indicates market overvaluation from an investment perspective.
Rental demand remains strong due to Tel Aviv's employment opportunities and lifestyle appeal, but rental growth has not kept pace with property price increases, further squeezing yields.
How affordable are Tel Aviv properties compared to local incomes?
Tel Aviv properties are exceptionally unaffordable relative to local incomes, ranking among the world's least affordable housing markets.
The median home price is approximately 15-18 times the average gross household income in Tel Aviv, far exceeding international affordability benchmarks of 3-5 times income. This ratio has deteriorated significantly over recent years.
Most Tel Aviv residents cannot afford to purchase property in their city, leading to high rental rates and delayed homeownership. Young professionals and families often relocate to surrounding areas for affordable homeownership opportunities.
The affordability crisis has become a major policy concern, with government initiatives aimed at increasing housing supply and providing first-time buyer assistance, though these measures have had limited impact so far.
What percentage of Tel Aviv residents own versus rent their homes?
Less than 40% of Tel Aviv residents own their homes, significantly below Israel's national homeownership rate of 65-70%.
The majority of Tel Aviv residents are renters, reflecting the city's high property prices and young demographic profile. Many residents rent out of necessity rather than choice due to affordability constraints.
This ownership pattern contrasts sharply with other Israeli cities where homeownership rates are higher. The rental market in Tel Aviv is therefore larger and more established than in other parts of the country.
The low homeownership rate contributes to rental market pressure and highlights the disconnect between property prices and local purchasing power.
How many new residential units are being built in Tel Aviv?
Tel Aviv added approximately 3,500-5,000 new residential units in 2024-2025 through completions and approvals, but this supply is insufficient to meet demand.
New construction faces significant challenges including limited available land, high construction costs, and bureaucratic delays in the approval process. These constraints prevent meaningful supply increases despite strong demand.
The supply-demand imbalance continues to create upward pressure on prices, as new inventory cannot keep pace with population growth and housing demand. Development is concentrated in high-rise projects and urban renewal initiatives.
Government efforts to streamline approvals and encourage development have had limited success in meaningfully increasing housing supply relative to demand levels.
It's something we develop in our Israel property pack.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Israel versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What are current mortgage rates and their impact on affordability?
Mortgage interest rates in Israel typically range from 4.5-5.5% for 20-25 year fixed or variable loans as of mid-2025.
These rates represent a substantial increase compared to post-pandemic lows, significantly impacting monthly affordability for Tel Aviv buyers. Higher rates have increased monthly payment burdens and further eroded affordability for first-time buyers.
The combination of high property prices and elevated mortgage rates has created a double affordability challenge, pricing out many potential buyers from the Tel Aviv market. Monthly payments for average apartments now consume a disproportionate share of household income.
Interest rate increases have not meaningfully cooled the Tel Aviv market due to ongoing supply constraints and persistent demand, though they have affected buyer profiles and financing strategies.
How active are foreign buyers in the Tel Aviv market?
Foreign buyer activity in Tel Aviv is lower than pre-2020 peaks but remains significant, accounting for approximately 5-8% of transactions as of 2025.
International buyers face higher taxes and increased procedural complexity, which has reduced their market participation compared to previous years. However, they maintain a disproportionate influence in the high-value and luxury segments.
Foreign investment is concentrated in prime neighborhoods and luxury properties, where international buyers seek portfolio diversification and potential residency options. Their presence contributes to price pressure in premium segments.
Tax policy changes and regulatory adjustments continue to influence foreign buyer behavior, though Tel Aviv remains attractive to international investors despite increased costs and complexity.
What are the total costs of owning property in Tel Aviv?
Total transaction costs for Tel Aviv property buyers typically add 10-15% above the purchase price for taxes, legal fees, and closing costs.
| Cost Category | Typical Range | Notes |
|---|---|---|
| Purchase Tax | Up to 8-10% | Higher for non-residents and expensive properties |
| Legal Fees | 1-2% | Attorney and transaction costs |
| Municipal Tax (Arnona) | Varies by area | Annual property tax, high in Tel Aviv |
| Maintenance Fees | ₪500-2000/month | Higher in luxury and full-service buildings |
| Property Management | ₪200-800/month | For investment properties |
Municipal property tax (Arnona) rates are particularly high in Tel Aviv compared to other Israeli cities, adding to ongoing ownership costs. Maintenance fees in newer and luxury buildings can be substantial, sometimes exceeding ₪2,000 monthly.
These additional costs significantly impact the true cost of ownership and investment returns, making total ownership expenses considerably higher than the initial purchase price suggests.
Do experts consider Tel Aviv property overvalued?
Real estate analysts and government housing reports consistently indicate that Tel Aviv property is extremely overvalued relative to local incomes and long-term economic fundamentals.
Expert consensus points to clear overvaluation, particularly in prime central locations where prices have disconnected from underlying economic metrics. The price-to-income ratios and rental yields suggest fundamental misalignment with market fundamentals.
Risk factors identified by experts include affordability ceilings, potential interest rate shocks, and government attempts to expand housing supply. However, sustained demand and persistent undersupply have prevented sharp price corrections despite overvaluation concerns.
Most market observers expect continued price pressure in the near term due to supply constraints, though long-term sustainability questions remain given current valuation levels and affordability challenges.
It's something we develop in our Israel property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Tel Aviv represents Israel's premium real estate market with prices that reflect its status as the country's economic and cultural center, but current valuations raise serious affordability and sustainability concerns.
For potential buyers, the market offers opportunities for those with substantial capital, particularly in emerging neighborhoods, but requires careful consideration of high entry costs, low yields, and long-term value sustainability given current price levels relative to local incomes.
Sources
- Sands of Wealth - Average Price per sqm Tel Aviv
- Easy Aliyah - Haifa Real Estate Market Report Q1 2025
- YNet News - Business Article
- Sands of Wealth - Average Price per sqm Jerusalem
- Semerenko Group - Market Insight Apartments for Sale
- Genesis Estates - Cost of Real Estate Purchases in Israel
- Native Israel - Tel Aviv Real Estate
- Sands of Wealth - Average Apartment Price Israel