Young techies buying high-end Tel Aviv homes

Residential building project in north Tel Aviv  credit: Eyal Izhar

Realtors report that the money flowing into the technology industry is finding its way to the real estate market.

The big money that has been flowing into the technology industry in the past year is partly reaching the local real estate market. Market players say they sense the phenomenon, which could to some extent explain the recent market boom and rise in prices. In Tel Aviv, for example, the average age of home buyers has fallen perceptibly. In the recent past, demand in the city was mainly from older, well-to-do people.

"You are suddenly seeing 30-40 year olds looking for apartments in the city center or in the Old North, at prices that could reach as high as NIS 10 million," says Zvi Schwartz, a consultant with the Anglo-Saxon real estate agency in Tel Aviv. "Or take, for example, a garden apartment that we currently have on the market in the Old North at NIS 6 million. All the people who have come to view the apartment are young. True, it's not a prestige apartment, but NIS 6 million is a lot of money, and you don't understand where they get it from, and then they tell you that they're in high tech."

A young couple working in technology recently bought an apartment in the center of the city for no less than NIS 10.5 million. "It's a great deal of money, but if you have just received a million dollars, you want to do something with it, and it's enough to buy an apartment at that kind of price, providing that your salary can meet the high mortgage repayments," Schwartz adds.

Young techies prefer the center of the city to residential towers, and a substantial proportion of their purchases are actually in the older neighborhoods, which are identified with urban living and the ability to get around by bicycle.

The period of the coronavirus pandemic, which very much restricted overseas travel, left most of the technology workers' money at home. At the same time, the pandemic also highlighted the limitations of small rental apartments, which made life difficult for those who lived and worked in them during the lockdowns, and spurred those with the means to find apartments to buy.

It Is not just central Tel Aviv, however, that is attracting newly rich young techy buyers. Shai Shtern of the RE/MAX Plus agency in Beersheva reports that young investors are flocking to the southern city. "Only yesterday, three friends working in Petah Tikva came in, and bought new apartments from a contractor in a pre-sale, in the New Park neighborhood," he says.

The neighborhood, at the southern entrance to Beersheva, will, as its name implies, have a park, with a large lake, and these investors bought three four-room apartments at between NIS 1.3 and NIS 1.4 million, overlooking the park.

Most tech workers from central Israel investing in Beersheva real estate make do with cheaper apartments. Shtern says that most of them come to buy apartments close to the university. 80-90 square-meter apartments five minutes walk from the campus can go for NIS 900,000, and can be rented for NIS 3,000 a month.

"Apartments did not stay empty during the coronavirus period, and students who left them found afterwards that they had been taken by others. The fact is that today there isn't a supply of apartments in the immediate vicinity of the university," Shtern says.

Published by Globes, Israel business news - en.globes.co.il - on April 27, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Residential building project in north Tel Aviv  credit: Eyal Izhar
Residential building project in north Tel Aviv credit: Eyal Izhar
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