Treasury Data Shows How the High Tech Slump Is Filtering Into Tel Aviv’s Housing Market

An analysis published by the deputy chief economist at the Finance Ministry points to weakness in Tel Aviv’s housing market: only 86 second hand apartments were sold in the city in April. According to the data, just 11% of buyers of second hand apartments in the city were high tech workers, a sharp decline from previous analyses. The report comes against the backdrop of layoffs in high tech and a drop in employment of research and development workers in the sector for the first time in a decade.

Short summary: In recent months, the high tech sector has experienced mass layoffs. In April, only 86 second hand apartments were sold in Tel Aviv. The share of high tech workers among buyers fell to just 11%.

Why it matters: The high tech boom is considered a major factor in the surge in prices in Tel Aviv. The wave of layoffs in Israeli high tech is beginning to filter into Tel Aviv’s real estate market as well, according to a preliminary analysis published this week by Deputy Chief Economist Gali Ben Na'im of the Finance Ministry, based on Land Tax Authority data for April.

The figure she emphasizes is particularly stark, in April, only 86 second hand apartments were sold in Tel Aviv, a city that she says has about 220,000 apartments and about 7,000 apartments currently for sale. The comparison she offers illustrates the drop, “a gap of only 30 transactions between Tel Aviv and Tiberias. ‘A drop in the bucket’ is an understatement.”

What is behind the decline? Ben Na'im points to a striking finding in the buyer mix: only 11% of buyers of second hand apartments in Tel Aviv during April were high tech employees, a significant drop compared with previous analyses she conducted. And this, as she notes, is “in a city so closely associated with high tech workers.”

The boom in the high tech industry in recent years is considered one of the main drivers behind the sharp rise in real estate prices in Tel Aviv, at rates far higher than the rest of the country. Many projects were marketed directly to high tech workers, many of whom had amassed large sums of money following the wave of public offerings in recent years. Against this backdrop, last year the average price of a four room apartment in Tel Aviv crossed the 5 million shekel mark for the first time.

The dramatic figure presented by Ben Na'im comes amid broad layoffs in the high tech sector and a continued stagnation in the number of workers in the industry. And as the annual report of the Innovation Authority published last week showed, in 2025 there was, for the first time in a decade, a decline in the number of local research and development workers, the segment of employees with the highest average salary in the industry.

Is the retreat of high tech workers from the market what caused the sharp drop in demand for apartments in the city? Ben Na'im is cautious and says it is “too early to determine,” but adds an indirect sign, “Among the many advertisements from contractors these days, we do not see offers aimed at this population of high tech workers.”

In the new apartment market in Tel Aviv, the picture is somewhat different, the share of high tech workers there stands at 18%, and contractors’ promotions, which according to Ben Na'im are becoming “more and more creative,” are still sustaining demand. But here too there is a surprising finding about the identity of the buyers: two thirds of second hand apartment buyers are Tel Aviv residents themselves, while in the new apartment market city residents account for only one third.

Who is filling the gap? Some of the buyers are coming from cities that hardly appeared in Tel Aviv purchase data in the past, such as Ofakim, Netivot, Beersheba and Dimona. Ben Na'im wonders whether these are באמת people who plan to move to the city, or whether they are trying to generate capital gains by taking advantage of the financing benefits offered by contractors, which could also put them at future risk.