Israel's August Inflation Hits 0.7%, Housing Prices See Modest Rise

Israel's consumer price index (CPI) rose by 0.7% in August, falling short of analysts' predictions of a 0.9% increase. On an annual basis, the CPI has climbed 1.5%. Significant price hikes were observed in fresh vegetables (2.9%), transportation (2.7%), culture and entertainment (2.0%), and housing (0.6%). Conversely, notable price decreases occurred in fresh fruits (-2.0%), clothing (-0.8%), food (-0.5%), and furniture and home equipment (-0.3%).

Regarding the housing market, apartment prices saw a slight monthly increase of 0.2% in June-July. New apartments rose by 0.5%, or 0.4% when excluding the impact of government housing programs. Annually, apartment prices decreased by 1.2%, with new apartments down 0.8%.

Geographically, Jerusalem experienced a surprising 0.4% drop in apartment prices, while the North saw a 0.1% decrease. The Central district recorded a 0.3% rise, Tel Aviv 0.7%, and the South a minimal 0.1% increase. Over the past year, the Central district saw the steepest decline at 3.2%, followed by Haifa at 2.4%. Tel Aviv and the South experienced annual drops of less than 1%. Jerusalem, however, saw an annual increase of 1.1%, and the North about 1%.

A new quarterly index for second-hand apartments revealed a 1.2% decrease in the second quarter of 2026 compared to the first. Jerusalem led this decline with a 2.9% drop, followed by Tel Aviv (-2.0%) and the Central district (-1.1%). The Southern, Northern, and Haifa districts registered minor increases of 0.3%, 0.1%, and 0.1%, respectively.