Thriving, dynamic, and a tech magnet: Why wealthy Tel Aviv is the Manhattan of the Mediterranean

While Jerusalem prays, Tel Aviv plays. Sure, it’s a sweeping generalisation, but the saying does shed light on the different personalities of the two Israeli cities.

Modern Tel Aviv – dubbed the “Mediterranean Manhattan” – is a thriving, dynamic, multicultural city with an enviable climate, spectacular water views and a booming tech industry fuelling demand for luxury property.

In February, Savills released its Tech Cities 2017 report. Tel Aviv appeared in 15th spot, one behind Melbourne, in the survey that measures a combination of factors such as business environment, city buzz and wellness, real-estate costs, tech environment and talent pool.

Tel Aviv boasts a vast range of architectural styles, from Baroque to Art Deco, Bauhaus and ultra-contemporary designs, especially among a new breed of high-rise towers near the water.

A centuries-old three-bedroom home in the Old City of Jaffa offers history and luxury in an area brimming with artisans, fashion houses, galleries and other cultural delights. Dating from the Mamluk period, the property features Mediterranean Jaffa stone, high-vaulted ceilings, an internal patio and a 160 sq m roof terrace with sweeping views of the ancient port city.

It’s listed through Israel Sotheby’s International Realty with an asking price of $US9.44 million (about $12 million).

Current market

Property prices in Israel have risen 135 per cent over the past decade, according to Savills. The Israeli government has introduced measures such as new and higher taxes on investors in an effort to curb the red-hot market.

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Roni Yahav, the general manager of Israel Sotheby’s International Realty, says the luxury market in Tel Aviv has slowed down – or in some areas, frozen – over the past two-and-a-half years, creating new opportunities in some of the city’s most prestigious neighbourhoods. “Now we feel some very good vibes and dynamics which are showing an awakening,” Yahav says.

Can Australians buy in?

“Of course – and actually they do,” Yahav says. “We have some very serious and good clients from Australia that come back and forth to buy … prime location assets in Tel Aviv and the surrounding areas, and the quantity is going up and up.”

Foreigners are hit with a land appreciation tax (another name for capital gains tax) and higher acquisition taxes than locals who own just one home.