Tech employees are at highest income earners in Israel with an average gross monthly salary of NIS 32,215 in June, more than double the national average salary, according to the Central Bureau of Statistics. Between June 2023 and June 2024, the average salary of a tech employee rose 8%, compared to 5.1% for all salaries in Israel.
It is therefore no surprise that tech employees choose to live in the most in-demand regions. According to research by real estate website Madlan, the northern part of the Tel Aviv metropolitan region is the preferred place for tech employees to live with central and northern Tel Aviv itself the most popular, either for buying or renting apartments.
Tech employees prefer Tel Aviv
Two neighborhoods in central Tel Aviv have the highest concentration of tech employees: the Old North and the city center to the southeast including Marmorek, Dizengoff, Ben Gurion Boulevard, Ibn Gbriol, Montefiore and adjacent to Sarona and the Azrieli Center. According to Madlan, 27.4% of apartments in these areas are occupied by tech employees.
In second place are the two neighborhoods around Rothschild Boulevard: the Lev Hair neighborhood including Carlebach Street and King George street and south of Rothschild Boulevard between Ahad Ha'am Street and Jaffa Road with a 26.8% concentration of tech employees.
In four other Tel Aviv neighborhoods, tech employee comprise 25% of residents: the neighborhood immediately north of the Old North between the Yarkon River and Ibn Gbriol Street, Jabotinsky Street and the Metzitzim Beach; the western part of Lev Tel Aviv between Gan Meir and Bograshov Beach; Sarona between Ha'arba'ah Street and Kaplan Street; and Florentin. In fact, eight of the ten neighborhoods with the highest concentration of tech employees are in Tel Aviv. The two exceptions are the new Glil Yam neighborhood in Herzliya and the Lamed Heh neighborhood in Givatayim, where 25% of residents are tech employees.
The preference of tech employees to flock together in central Tel Aviv neighborhoods and the Old North explains the high prices of office leases nearby within a 'half a e-scooter battery' distance, in the language of tech employees and the realtors serving them. The new office towers built in the area including the Landmark project in Sarona, the Da Vinci complex, the office towers at the Peace Junction and the Alon towers - are trying to attract the technology companies and present the highest rental prices in the market, partly based on the advantage of being close to the sought-after neighborhoods.
In the 11-20th favored neighborhoods by tech employees, there are more diverse neighborhoods in the Tel Aviv metropolitan region, two of them in Givatayim: City and Sheinkin. Also prominent are the Yarok neighborhood in Kfar Saba and the 200 neighborhood in Hod Hasharon. Also, three more Tel Aviv neighborhoods are included in the second ten: the old central and southwestern north, the northern new north and the area around Kikar Hamedina. Ramat Gan appears only in the 21st-30th rankings with three sought-after neighborhoods: the City Center A, the Hagafen neighborhood and the Haruzim neighborhood.
Givatayim tops the list with Ashkelon at the bottom
The Madlan survey includes 1,300 neighborhoods including some with no tech employees at all. These include three neighborhoods in Dimona, four neighborhoods in Lod, two neighborhoods in Beit Shean, and neighborhoods in Ramla, Safed, Ashkelon and Migdal Hamek. The survey was conducted by processing data from the National Register of Citizens and the population census on statistical areas corresponding to the boundaries of the neighborhoods.
By cities, Givatayim has the highest concentration of tech employees in the country (18.4% of all residents), due to the fact that it is a smaller and more homogeneous city in terms of its population composition. Tel Aviv is in second place (14.4%) with the aforementioned popular neighborhoods alongside particularly low concentrations of tech employees, in neighborhoods like Kfar Shalem, Ajami, Hatikva, and Jaffa C and D neighborhoods. Other prominent cities in terms of the proportion of tech employee residents include: Ramat Gan and Hod Hasharon (13% of the residents), and Herzliya, Ra'anana and Ramat Hasharon with 12%.
In Haifa, which is known as the "Silicon Valley" of chip companies in Israel, a fairly low rate of tech employees was found of only 5.8%. Even in two of the largest cities - Jerusalem and Beersheva - the rate is extremely low (4.2% each). Among the big cities, Ashkelon ranks at the bottom of the list with 2.4%.
Are the neighborhoods sought after by tech employees also the most expensive? Not necessarily. There is only a partial correlation (about 50%) between the concentration of tech companies and the price per square meter of residential property. Thus, the most expensive neighborhood in Israel in terms of price per square meter, the neighborhood surrounding Kikar Medina in Tel Aviv (NIS 71,000 per square meter), ranks only in 18th place for concentration of tech employees. Furthermore, in the Lamed Heh neighborhood in Givatayim, the price per square meter is relatively low compared to much of the Tel Aviv metropolitan region, NIS 39,000, but it ranks in the top ten. However, most of the neighborhoods in the top ten - the neighborhoods of central Tel Aviv and the old north - do have high price levels ranging around NIS 65,000 per square meter.
Madlan CEO Tal Kopel says, "Many young people move to Tel Aviv because of its developed cultural and leisure life, and the liberal atmosphere. The commercial companies want to employ the best people and therefore locate themselves near concentrations of young people. The result is a circular process that drives demand and raises prices. The concentration of tech employees in Tel Aviv is not surprising, since it is an industry with relatively high salaries. Tel Aviv is the capital of employment in almost all industries, but it seems that to live there you need a tech salary - and preferably more than one."
Published by Globes, Israel business news - en.globes.co.il - on September 29, 2024.
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