Tel Aviv surpasses Paris and Singapore to become the most expensive city in the world

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Israeli musician Shir Meir lives in a Tel Aviv hostel room with three friends, sharing a kitchen and bathroom with others as they struggle to survive in the most expensive city in the world.

“We reached a point of desperation” with house prices, the 22-year-old said. “There is no normal apartment for young people who are starting their life in this city.”

Meir is one of nearly half a million residents of the coastal metropolis who are grappling with a skyrocketing cost of living.

Israel’s cultural and economic capital is now more expensive than Paris, Singapore, Zurich, Hong Kong and New York, according to an authoritative ranking compiled by the Economist Intelligence Unit.

It rose on the list in part due to the strength of the national currency, the shekel, against the dollar, as well as increases in transportation and grocery prices.

Meanwhile, Syria’s neighboring capital Damascus was listed as the cheapest city in the world to live in.

Sitting on a bench on a central Tel Aviv shopping street lined with boutiques and gleaming renovated apartments, Janine Vosburgh said she now avoided luxuries like restaurants and cafes.

“We live in the open,” said the 70-year-old woman, pausing as a passerby begged her for money.

Strong shekel

Vosburgh, who runs the Israel Multiple Sclerosis Society, said some patients couldn’t afford their medications.

But the former Manhattan resident told AFP that she couldn’t feel at home in any other Israeli city.

“The ideas of Tel Aviv and freedom and consideration for everyone, regardless of age, gender, religious affiliation … suits my way of thinking,” he said.

The high cost of living has been a persistent problem in Tel Aviv.

In 2011, a “tent revolution” saw young Israelis furious at steep rent increases that set up shelters on luxurious Rothschild Boulevard in the heart of the city.

A decade later, the carp disappeared, but the rising prices remained.

“The protest had a temporary effect,” said Asher Blass, a former Bank of Israel chief economist.

Tel Aviv’s ranking this year is mainly due to the strength of the local currency, he said.

Last month, the shekel hit a 25-year high against the dollar.

As the cost of housing and other basic items like groceries has risen, wage growth has been uneven.

“Much more needs to be done to open up competition to goods like agricultural products” to lower prices, Blass said.

‘Good bet’

Rising costs are a windfall for some in Tel Aviv.

At Rothschild Real Estate, which caters primarily to foreigners and wealthy Israeli tech workers, co-owner Eyal Furmansky said prices for high-end homes jumped more than 10 percent last year.

“Wherever you put your chips, it’s a good bet,” he said.

Furmansky said his customers were more concerned about the strong shekel than the rising cost of daily goods.

“People from the UK, from the US, from Europe feel like it’s harder for them to buy,” he said.

There is “only one Tel Aviv and in this city there are very specific places that people want to live,” he added.

For others, the appeal of Tel Aviv and its skyrocketing prices is beginning to wane.

At a central outdoor produce market, student Aimy Schefner said groceries were more expensive than in her hometown of Haifa.

The 26-year-old aspiring actress said she viewed life in Tel Aviv as a temporary high expense, akin to “a trip abroad.”

“You know it’s for a while, it’s not for your whole life,” he said.

(AFP)