Israelis flee Tel Aviv for more affordable housing

Moving to Tel Aviv and living in the big city is often a stage in the lives of many young people. As the economic center of Israel, it is clear why Tel Aviv is a magnet for young people from all over the country. However, new data reveals that in recent years, the picture has been reversed. In 2018 and 2019, more Israelis moved to Tel Aviv than left, but since 2020, more people have left, and the trend is increasing. In the latest figures for 2022, nearly 7,000 more people left the city than moved to it, according to new data from the Tel Aviv-Yafo Municipality.

The Covid pandemic has pushed many people out of the big cities, and remote work has made this economically viable. This trend has continued even more strongly in 2022. Housing prices, which were already at an all-time high at the time, likely drove many people away from Tel Aviv. Since 2020, the number of net departures has been increasing every year.

Although Tel Aviv experiences negative net migration in most years, the latest figures show the most extreme negative migration that has occurred in decades. The last time such strong negative migration was recorded, in absolute terms, was in 1997, when nearly 8,000 more people left the city than moved to it. Even when you factor this into Tel Aviv’s population, 2022 was a particularly extreme year. 14.9 people left the city per 1,000 residents. The last time there was such a high rate was in 1999. In general, the 1990s were a time when Tel Aviv was not a desirable city to live in and many left. But over the past decade, the trend has been changing, making the period 2020-2022 particularly unusual.

natural growth

However, Tel Aviv’s population is still growing. In the five years between 2018 and 2022, Tel Aviv’s population rose from 452,000 to 475,000. “From a long-term perspective, migration to Tel Aviv is a net negative,” explains Leah Ashwach, director of the Tel Aviv-Yafo Municipality’s Center for Economic and Social Research. “In the 1990s, for example, thousands left the city every year. However, population growth is positive, and today the city’s population is almost 480,000 – a record since its founding. This is due to natural growth, i.e. births minus deaths, and to new people entering the city.”

However, upon further analysis, it can be seen that the number of children aged 0-4 in the city actually decreased from 34,000 in 2018 to 32,000 in 2022. Regarding new immigrants, more than 9,600 people immigrated to Tel Aviv from other countries in 2022, the highest number since 1993. This is a significant jump compared to previous years, and may be related to the war between Russia and Ukraine that broke out in 2022. In total, including departures, the balance of international immigration to Tel Aviv stands at 8,900 this year.

Why does this happen? “It’s hard to pinpoint a single factor that causes net negative migration,” says Ashwak. “It’s also tied to life cycles, with more young people entering and leaving, and the opposite is true for older people.” The city is mostly populated by people aged 20-29, and in 2022, over 9,000 people entered Tel Aviv, while about 4,500 left. The situation is quite different in the older age groups. Only 5,700 people aged 30-44 entered the city, while about 11,000 left – which makes sense given the cost of living in the city, along with the stage of life at which children typically enter the picture. Among those over 45, the ratio is similar, with 2,800 people entering and 5,100 leaving. The younger age group in particular (0-19) also has significantly more people leaving than entering; These children are likely moving with their parents who are leaving town.

This phenomenon is also common in other major cities around the world. An April 2024 study noted similar trends in major cities in Canada, where researchers found that departures from these cities also accelerated in the wake of the Covid pandemic.

The hypothesis that rising housing prices accelerate outward migration is strengthened when examining the city’s different neighborhoods, with a focus on internal migration between neighborhoods. While the city center and the old north suffer from very negative internal migration, outer areas such as Ramat HaHayal, north of the Yarkon River and Jaffa actually experience very positive migration. “In the coming years, the trend may reverse and we will see positive net migration, due to the massive construction in the northwest of the city, in the former Sde Dov area,” Ashwak asserts. “When there is massive construction in Tel Aviv, people come to the city.”

Residential construction: 15 thousand apartments under construction

The number of housing units in the city is slowly increasing. Between 2019 and 2023, the number of houses increased by 5% from 211,000 to 222,000 – roughly the same as the city’s population growth rate. In line with national trends, apartments are also getting bigger, so built-up residential area increased by 6.7% over the same period.

Tel Aviv’s business district, located on the western side of the Ayalon neighborhood, which is not characterized by many residential areas, has recorded a particularly impressive jump in construction. Between 2019 and 2023, this area will see a rise from about 5,200 apartments to about 7,500 apartments, an increase of 44% in just five years. However, even after construction, this is the area with the fewest residential units. The northern Old City comes first in the residential sector with more than 37,000 units, followed by the eastern part of the city and northern Yarkon.

In terms of building permits, we have seen a significant increase in recent years, with 3,128 new apartments approved in 2017, rising to 6,502 new apartments in 2022. The number decreased slightly to 5,339 apartments in 2023.

The Tel Aviv-Yafo Municipal Area Plan has approved massive development in the Kikar Hamedina area, where over 3,200 housing units are under construction, while in the adjacent area No. 4 (New North) there are over 5,500 housing units under construction. Over 2,000 additional housing units have received building approval and are awaiting construction to begin. In total, there are over 15,000 housing units currently under construction in Tel Aviv, and this pace has been increasing in recent years.

“We don’t know how to explain this net negative migration,” the Tel Aviv-Yafo municipality said. “There may be a combination of reasons. As the director of the Economic and Social Research Center, Leah Ashwach, pointed out in the interview, if you look by age group, young people have a positive balance and the rest of the groups have a negative balance. The trend has continued according to age groups over the years.”

This article was published in Globes, Israeli Business News – en.globes.co.il – on July 14, 2024.

© Copyright Globes Publisher Itonut (1983) Ltd., 2024.