Israel's Inflation Slows Sharply, Housing Prices Dip
Translated & summarized from Mako by baba
Israel's inflation rate slowed more than expected in September 2026, with the consumer price index falling 0.5% and the annual rate reaching 1.6%. Housing prices also declined by 0.6% monthly and 1.8% annually, with the central and Tel Aviv districts showing the largest drops. These figures may influence the Bank of Israel's upcoming interest rate decisions.
The story in 6 lines · by baba
- Israel's September inflation fell 0.5%, exceeding forecasts and bringing the annual rate to 1.6%.
- Overall housing prices decreased by 0.6% in July-August compared to the previous two months.
- New housing prices dropped 0.4% monthly, and 0.8% excluding government subsidies.
- Annual inflation is now within the Bank of Israel's 1%-3% target range.
- Rent prices increased, with new tenants seeing a 5.3% rise.
- The central and Tel Aviv districts saw the largest monthly housing price decreases.
Israel's consumer price index (CPI) fell by 0.5% in September 2026, exceeding economists' forecasts of a 0.3%-0.4% decrease. This decline follows a 0.7% rise in August, which was driven by increased fuel and international flight costs. The annual inflation rate has now slowed to 1.6%, falling within the Bank of Israel's target range of 1% to 3%.
Significant price drops were observed in culture and entertainment (down 2.7%), transportation (down 2.5%), clothing and footwear (down 0.9%), and food (down 0.4%). However, prices increased for fresh vegetables (up 6.6%), education services (up 0.8%), and rent. Rent prices rose by 2.4% for renewing tenants and 5.3% for new tenants in apartments with a change of occupancy.
Housing prices experienced a notable decrease, falling by 0.6% in July-August 2026 compared to June-July 2026. New apartment prices dropped by 0.4%, and by 0.8% when excluding government-subsidized deals like "Price for a Home" programs. Regionally, the northern (down 1.5%), central (down 0.7%), and Tel Aviv (down 0.9%) districts saw the largest monthly declines in housing prices.
On an annual basis, the housing price index decreased by 1.8% in July-August 2026 compared to the same period in 2025. New housing prices saw an annual decrease of 0.4%. The central district experienced the largest annual drop in housing prices at 2.7%, followed by Tel Aviv at 1.9%.
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