Tel Aviv is finding its way onto more and more lists of “the most expensive” – this time, on the Mercer list of most expensive cities for expatriate Americans. Mercer is a company that assist employees relocate to new cities and countries, and in the company’s 25th annual survey, Tel Aviv is the 15th most expensive city for expats, and the most expensive in the Middle East.
According to the company, it derives its ratings from cost of living and rental accommodation cost comparisons based on an annual survey, the latest of which was taken this past March. “Cost of living is an important component of a city’s attractiveness for businesses,” said Yvonne Traber of Mercer, adding that “many currencies in the Middle East are pegged to the U.S. dollar, which pushed cities up in the ranking, as well as steep increases for expatriate rental accommodations.”
The most expensive city in the world to relocate to was Hong Kong, followed by Tokyo, Singapore, and Seoul. Shanghai and Beijing ranked numbers 6 and 8 on the list. The only European city in the top ten most expensive cities for expats was Zurich, coming in number 5. New York is only the 10th most expensive. Tel Aviv is more expensive to relocate to than both San Francisco and Los Angeles. The next most expensive city in the Middle East is Dubai, which ranks 21st.
In a recent poll by Bloomberg, Tel Aviv and Yerushalayim came in as among the most expensive in the world for overnight stays, both in hotels and via services like AirBnB. Tel Aviv, where the average overnight stay tops $183, came in as the fourth most expensive city to rent a property, while Yerushalayim, at $173 a night, was the world’s ninth most expensive city to stay in.
Bloomberg quoted Yoav Kerner, a lecturer of statistics at Ben-Gurion University in Israel, as saying that Israel’s high real estate prices were a major factor in the numbers. Renting out apartments on a nightly or weekly basis is simply more profitable than renting them out on regular leases. According to Kerner, “apartments in Tel Aviv typically eat up at least three-quarters of the average person’s gross income, said Kerner, who studied the Airbnb market in Tel Aviv on behalf of a hoteliers group,” said Bloomberg.
“Since Airbnb owners want a premium over what they could earn renting out their units for a full year, that drives up short-term rental costs, he said. Kerner estimated that the sites have helped push up overall Tel Aviv rents by about 10 percent, Bloomberg quoted him as saying.