Tel Aviv: Spending a day in the world's most expensive city

To anyone who lives in or visits Tel Aviv, prices for everything seem to be steep compared to the rest of the country. Last month, The Economist confirmed that impression by naming the metropolis by the sea as the world’s most expensive city.

The publication’s sister company, the Economist Intelligence Unit, released a survey that detailed the cost of living in 173 cities around the world and, wouldn’t you know it, Tel Aviv came out on top.

This is due in part to the shekel’s rise in value against the dollar. In addition, the survey cites rising alcohol, grocery and transport prices as primary drivers on the road to the No. 1 position, an honor shared by Paris, Hong Kong and Zurich in 2020.

The ranking comes as no surprise to Tel Aviv residents, who regularly face exorbitant prices in housing, groceries and double lattes.

What is it like to live in the world’s most expensive city? Let’s start by spending a day there as a Tel Avivian and see how much things cost.

A humble breakfast

I aimed to start my day as I do most days: a coffee, a pastry, and a crossword puzzle that will inevitably go unfinished.

After disembarking from the train, I searched for a café that would give me a fair representation of Tel Aviv breakfast prices, and I settled on a small place not far from the looming Azrieli Center.

I placed my order – a small coffee and a pastry (NIS 27) – and sat down to plan my day, while observing the early morning foot traffic.

RUNNING TOTAL: NIS 27

Morning shopping

My next stop was the supermarket, to scope out some of the prices that Tel Avivian store owners are asking for their goods. I made my way to a certain popular grocery store chain (the physically smaller one of the two or three you’re thinking of) and perused what I consider to be ground zero for both price comparison research and a healthy diet: the produce section.

One main staple that could be compared across several stores: the Granny Smith apple, the most common fruit, in its most elegant form. I also checked out the prices of a few other items, but the sour green apple would be my baseline, as it was common enough to spot in any shop. In the large chain supermarket, Granny Smith apples sold for NIS 10.90/kg., seemingly a reasonable price.

At another inner-city chain store (which is open both in the daytime as well as the nighttime, as their branding suggests), the prices were significantly steeper: here, dear sweet Granny Smith was on sale for NIS 14.90/kg. Also worth noting was that here, avocados weighed in at the same price of NIS 14.90/kg., which will be relevant later on.

I decided that individual price checking paled in comparison to actual estimates from Tel Avivians, so I polled some local residents. One family of three spent NIS 400 to NIS 600 on produce a week, NIS 1,000 on assorted groceries, and an additional NIS 300 on meat products; plus ordering out a few times a week, which added up to about NIS 600. I decided that I would use that average for my scientifically sound running total.

RUNNING TOTAL: NIS 2,427.00

Real estate

Scoffing at the price of an apple is one thing, but I knew that if I wanted to understand the true cost of living in Tel Aviv, I’d need to broach a sensitive topic: how much are people paying for rent? Luckily, I have a few friends who were open enough to lay out some numbers on the table.

“Our rent is NIS 5,500, and we have a dream apartment that we never want to leave, because we’ll never find a deal as good as that,” says Kevin, who works in the hi-tech sector. His Tel Aviv apartment is, conveniently, 55 square meters, which allows for a shekel/square meter breakdown that even a communications degree can handle. I made a mental note and added this “good deal” to my running tally (NIS 5,500).

Kevin thinks his rent is fair, and he feels the weight of Tel Aviv’s cost of living only when he goes to the bar or buys electronics. He told me that, in his experience, the extra cost of buying electronics such as TVs and phones has gone down significantly in recent years. 

“Israel has always been a step behind because it was a socialist country; things were always more expensive, and you were getting paid less. Now, things are evening out. Israelis are making more money than ever.”

That increased income, which he attributed to the hi-tech sector’s success, has a trickle-down effect on the entire economy, he claims.

“Overall, yes, the rich are getting richer, but the poor are also getting richer.”

RUNNING TOTAL: NIS 7,927.00

Hatikva market

Speaking of the latter, I wanted to make sure I was getting a holistic view of the story. Sure, the hi-tech bros are doing just fine in the pricey city, but in south Tel Aviv, commonly described as the “working-class sector” of the city and the target for rehabilitation by the government, were things going as smoothly?

When you enter the Hatikva market, a few things hit you all at once: you’re treated to a pleasant view of banners and colorful stalls, you smell a variety of mouthwatering street foods (and also raw fish, if you’re into that), and you hear a beautifully harmonious chorus of men screaming at the top of their lungs trying to convince passersby that they have NIS 3 clementines that are better and more delicious than the other guy’s.

Here, an avocado, previously one of the most expensive fruits I’d encountered, was sold for only NIS 5/kg. In fact, any produce imaginable was available for a fraction of its inner-city price: the iconic Granny Smith is being hawked for a mere NIS 3/kg.

There’s a variety of people spanning the financial spectrum in the melting pot of the market: it isn’t uncommon to see groups of students in designer leggings perusing the various stalls, as others sit on the ground or low stools, asking shoppers for spare change. I stopped to ask a few of these mendicants about their cost of living in the city, but upon learning that I didn’t have any money I could give them, they all fairly declined to answer, except for one man, a middle-aged fellow sitting on a stool with a book of Psalms in his lap, who shrugged and said “Why not?”

“I’m doing okay, I’m doing very okay,” he said, stopping periodically during our conversation to thank and bless people for dropping coins in the cup he held aloft.

He told me that he rents a room nearby using the money that he collects in the market. On Sundays and Fridays, when the market is busy, he likes to sit here and read Psalms to pass the time while he asks for money.

“Israel, what we have here, it’s a good country,” he said. “Good people, really – really, they’re good people. Nobody is shunned for being in the street. I have no complaints.”

Obviously no one man’s experience can represent an entire population. Whether or not they choose to complain about it, close to 40% of Israel’s homeless population lives in and around Tel Aviv, with over 1,000 registered individuals known to the municipality. This is a population that isn’t experiencing the trickle-down effect that Kevin mentioned. 

In fact, according to the World Inequality Report 2022, the bottom 50% of the population in Israel holds only 5% of total national wealth, while the top 10% holds 62%. That income inequality gap is at least somewhat to blame for the number of homeless residents in the country, and specifically in places with such high rent as Tel Aviv. As cynical as it is to say, not everyone is as “lucky” enough as this man to be able to afford a room to rent.

I thanked him for his time, bought a bottle of juice from a nearby vendor (NIS 9.90), and made my way back to the inner city, where I somewhat guiltily had a dish of pasta for lunch (NIS 55).

RUNNING TOTAL: NIS 7,991.90

Good luck having kids

If you’ve made it this far and you’re not sweating the cumulative cost of groceries, rent and a few smaller food purchases here and there, buckle up: If you want to have kids and live in the city and work a day job (which means finding childcare/after-school activities), it’ll cost you.

I once again polled a herd of parents, and they didn’t hesitate to inform me that they’re paying, on average, NIS 4,319.50 for kindergarten alone. Primary school runs for a little more than half of that, at around NIS 2,800. If you want to go bonkers, you can mix in some after school programs such as English tutoring (NIS 370), a programming course (NIS 250) or tennis (NIS 280).

While we’re at it, I may as well throw in the cost of hitting the gym for the parents: that’ll be about NIS 400 per person. One family made me aware of a savings opportunity, though. If you get a family membership to a sports club, you need to pay only around NIS 500 per month for the whole family.

In total, if you have a toddler in a private kindergarten and a kid in primary school with one, average-priced after-school activity, and a sports club membership so you can hit the pool in the summer, you could be looking at upward of NIS 7,919.50.

“You absolutely need to be a two-income family, and even the early part in a couple’s career can be challenging financially,” said Hillel Wachs, who came from the US to Tel Aviv in 1983 and raised three children there.

“But like anywhere it’s a matter of how much you want to invest in developing your kids. Tel Aviv can be very expensive compared to a place like Jerusalem – childcare, after-school activities, special schools.

“Having two good wage earners together makes it much more feasible to live comfortably. And If that’s the case, you can enjoy Tel Aviv to its fullest.”

RUNNING TOTAL: 15,911.40

Summing up

As I made my way back to the train station, I reflected on what I’d discovered: a city defined by hi-tech, high rent, and high prices. While the positive impact that the city makes on the nation is more than apparent, it seems that a lot of that money is failing to “trickle down” as desired. As such, there are many Tel Avivians who are suffering from the high cost of essentials, let alone luxuries.

Also I’d discovered a chef depot store that sells more than six distinct types of spatula, which I thought was pretty cool.

And so, after having a falafel for dinner (NIS 18.90), my running total for a family of four’s monthly expenses – including a reasonable grocery bill, rent for a 55-square-meter apartment, private kindergarten for my toddler and an after-school activity for my kid, a sports club membership for the entire family, and a few on-the-go meals – adds up to NIS 15,931.30. 

Obviously, there are families who spend less, and there are work-arounds for nearly everything I researched, but a slightly deeper than surface-level look at the cost of living in Tel Aviv tells me at least one thing: I’ll be remaining in the suburbs for a while longer.