Israel's Inflation Rises to 1.6% Annually as Housing Prices Continue to Fall
Translated & summarized from Kan News by baba
Israel's annual inflation rate rose to 1.6% in September, despite a monthly CPI decrease of 0.5%, driven by rising vegetable and rent prices. Housing prices continued their downward trend, falling 0.6% in July-August and 1.8% year-over-year, with the Northern District seeing the largest drop. The Bank of Israel lowered its interest rate by 0.25% for the third consecutive time.
The story in 5 lines · by baba
- Israel's annual inflation rate increased to 1.6% in September.
- The Consumer Price Index decreased by 0.5% in September.
- Housing prices fell by 0.6% between July-August.
- Annual housing prices have decreased by 1.8%.
- The Bank of Israel cut its interest rate by 0.25%.
Israel's Consumer Price Index (CPI) saw a monthly decrease of 0.5% in September, exceeding expectations, according to data released by the Central Bureau of Statistics. Despite this monthly dip, the annual inflation rate edged up by 0.1 percentage points to 1.6%. Significant price drops in September were observed in culture and entertainment, down 2.7%, and transportation, down 2.5%. Clothing and footwear prices decreased by 0.9%, while food and home furnishings saw a 0.4% reduction each. Conversely, fresh vegetable prices increased by 6.6%, education services rose by 0.8%, and rent climbed by 0.4%. Rent for those renewing contracts increased by 2.4%, and for new tenants in apartments with a change of occupant, rent rose by 5.3%.
In parallel, the Central Bureau of Statistics reported a 0.6% decrease in housing prices between July-August compared to June-July. On an annual basis, from July-August 2025 to July-August 2026, prices fell by 1.8%. The Northern District experienced the steepest decline at 1.5%. Tel Aviv saw a 0.9% drop, the Central District 0.7%, Jerusalem 0.3%, and the Southern District 0.1%. The Haifa District was the only region to record a price increase, of 0.4%.
In the previous month, notable price increases included fresh vegetables (2.9%), transportation (2.7%), culture and entertainment (2.0%), and housing (0.6%). Conversely, fresh fruit prices dropped by 2%, clothing by 0.8%, food by 0.5%, and home furnishings by 0.3%. The Bank of Israel also reduced its interest rate by 0.25%, marking the third consecutive reduction.
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