Tel Aviv 4th most expensive city on Airbnb

Sunbathing in Tel Aviv or hitting Dubai’s fabulous malls will set you back a bit more lately. A combination of high hotel and apartment costs and strong tourism has Airbnb rates in some Middle Eastern cities among the world’s priciest.

In the latest Bloomberg index, Miami and Boston took the top two spots in the average daily cost of lodging in private dwellings for the second straight year. Airbnb owners asked for $205 a night and $195 a night, respectively, in the two cities. However, the Middle East has been climbing in the annual index and this year has five destinations among the top 15 priciest global cities: Tel Aviv and Dubai at Nos. 4 and 5, and Jerusalem, Riyadh and Kuwait City also near the top.

Dubai’s expensive short-term rentals, averaging $185 a night in Bloomberg’s index, probably are a function of high hotel rates in the Emirati city, where more than 70 percent of hotel rooms are four-star or above, said Ivana Gazivoda Vucinic of the international real estate firm Chestertons. Dubai’s supply of Airbnb units more than doubled to 3,249 units in the two years ended August 2017, following a relaxing of government regulations, according to Vucinic’s research on Dubai’s short-term rental market.

Dubai has spent billions to pump up its tourism sector and hopes to attract 20 million visitors to the city by 2020, up from 15.8 million visitors last year, according to figures from Dubai’s Department of Tourism and Commerce Marketing. Two U.A.E.-sponsored airlines, Emirates and Etihad Airways PJSC, have been among the world’s fastest-growing carriers in recent years. Should Dubai reach the 20 million visitor goal, it will be among the top five most visited cities globally, according to market research firm Euromonitor.

Pricey Airbnb listings in Israel may have more to do with the high cost of housing in Tel Aviv and Jerusalem, said Yoav Kerner, a lecturer of statistics at Ben-Gurion University in Israel. 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.

Short term rentals in vogue

The protest against sky-high housing prices in Israel inevitably took aim in part at nonresidents. Foreigners own thousands of apartments in prime areas, dwellings that stand empty throughout most of the year. Jews living elsewhere bought themselves homes in the Holy Land and keep them available for their convenience, exacerbating the housing crunch in the best areas of Israel, claim the protesters. The result is even more upward pressure on home prices, they conclude.

Yet a market has been developing in which these apartments are rented out for short periods of time. Brokers who mediate these short-term rentals say it's a win-win situation - for the owners that get some income from their property that otherwise stands fallow and costs upkeep, and for tourists who may prefer independence to hotel life. Israeli renters, however, are not appeased by the benefits to the foreign homeowners and tourists. What they see is a stifled housing market and rental prices that keep spiraling up." In the last year or two, more and more Jews living abroad decided to take advantage of property they own here," says Kfir Zohar, co-manager of the Anglo-Saxon Tel Aviv branch. He estimates the potential for short-term rental in Tel Aviv alone is 2,000 to 3,000 such foreign-owned apartments, whose nonresident owners spend, at most, a few weeks a year in occupancy. He also estimates that only about 15% of those apartments are rented out, while the rest stand unused most of the year.

The concept is gaining momentum: In the last two months, his agency closed 40 to 50 short-term rentals of foreign-owned apartments, Zohar says.Annual returns from short-term rentals are about 30% higher than long-term ones. At peak times, such as the Passover season, the rent can run double. Of course, at non-peak times the apartments may revert to standing empty. The potential clientele for short-term leases are business travelers and tourists. In addition, the apartments need to have features that meet the needs of transient dwellers. In Tel Aviv, for instance, the apartments should be no more than a 10-minute walk from the beach, and in Jerusalem, about the same distance from the city center. Business users would prefer apartments near the Tel Aviv business center or Ramat Gan Diamond Exchange. The apartments must be fully equipped and comfortable, too.

Yoni Shapira founded an Internet site, home4trip.com, which links tourists and homeowners. A three-room apartment in Tel Aviv, fully furnished and near the beach that can host up to four people, will run at $150 to $180 a night in a short-term rental, on average, he says. During peak summer season, in August, prices rise to $200 a night, he says. "Exclusive" apartments with a swimming pool in the building and that sort of thing can command three times as much, he adds. A visit to home4trip.com shows hundreds of apartments available for short-term rent in Tel Aviv, Jerusalem and other top cities. The ads cite the apartment's size, number of rooms, the furnishings and the price per night. A sign of the times is that the number of visits to the site has grown threefold in two years, Shapira says.

He came up with the idea of the site after living in Milan and meeting Italian Jews who owned apartments in Tel Aviv that they'd agree to rent out to people they knew. There were the apartments standing empty and there were the Tel Aviv hotels charging through the nose, Shapira explains. The rest is history. He began three-and-a-half years ago with a site targeting Italian Jews. Today, the site serves Jewish communities all over the world and has about 200 apartments on its books, belonging to about the same number of owners. It's worked: The apartments are rented out for almost all the year, Shapira says. The Anglo-Saxon real estate agencies in Tel Aviv and Jerusalem have started to work with the site too, he adds.

Source Haaretz

Tel Aviv: world's 29th-most expensive city

ECA International survey places Tel Aviv and Jerusalem in the top fifty, ahead of all other Middle-Eastern cities; Tokyo ranks number one.

Tel Aviv was ranked the 29th-most expensive city in the world in a recent survey released by ECA International, down from 18th place in 2010, making it the most expensive city in the Middle East. Jerusalem was ranked as the 33rd-most expensive city, down from 22nd place last year.

The most expensive city in the world for the second consecutive year, is Tokyo according to the survey. Rounding out the top five were two other Japanese cities, Nagoya and Tokohama, and Oslo and Stavanger in Norway. No other countries in the Middle East were in the top-50. Dubai was ranked as 175th-most expensive while Jeddah at 234th was the least expensive.

The figures were taken from from ECA’s Cost of Living Survey, which calculates the cost of living allowances for international assignees based on surveys that are carried out annually in March and September using a basket of day-to-day goods and services. The surveys provide data regarding employment conditions abroad, and as such do not take into account living costs such as accommodation and utilities, as these items are usually compensated for in expatriate packages. The surveys do cover the costs of food, basic services and general goods.