Israel's Inflation Slows Sharply, Housing Prices Dip
Translated & summarized from N12 by baba
Israel's September inflation rate fell by 0.5%, exceeding expectations and bringing the annual rate to 1.6%, within the Bank of Israel's target. Housing prices dropped by 0.6% in the July-August period compared to the previous two months, with new homes down 0.4%. Significant price decreases were seen in culture, transportation, and food, while rent and fresh vegetables saw increases. The annual housing price index declined by 1.8%.
The story in 6 lines · by baba
- Israel's September inflation slowed more than expected, falling 0.5% to an annual rate of 1.6%.
- Housing prices decreased by 0.6% in July-August compared to the prior two-month period.
- New home prices dropped 0.4%, or 0.8% excluding government-subsidized deals.
- The North region saw the largest monthly housing price drop at 1.5%.
- Annual inflation is now within the Bank of Israel's 1%-3% target range.
- Rent prices rose 0.4% overall, with new tenants seeing a 5.3% increase.
Israel's consumer price index (CPI) fell by 0.5% in September 2026, a steeper decline than the 0.3%-0.4% forecast by economists. This follows a 0.7% rise in August, which was driven by increased fuel and flight costs. The annual inflation rate has now dropped to 1.6%, falling within the Bank of Israel's target range of 1%-3%.
Significant price decreases were observed in culture and entertainment (down 2.7%), transportation (down 2.5%), clothing and footwear (down 0.9%), food (down 0.4%), and home furnishings (down 0.4%). Conversely, prices rose for fresh vegetables (up 6.6%), education services (up 0.8%), and rent (up 0.4%). Rent increases were particularly notable for those renewing leases (up 2.4%) and new tenants (up 5.3%).
Housing prices experienced a 0.6% decrease between July-August 2026 compared to June-July 2026. New home prices fell by 0.4%, and by 0.8% when excluding government-subsidized deals like "Price for a Home" programs. Regionally, the North saw a 1.5% drop, followed by the Center at 0.7% and Tel Aviv at 0.9%. Jerusalem prices decreased by 0.3%, Haifa by 0.4%, and the South by 0.1%.
On an annual basis, the housing price index decreased by 1.8% in July-August 2026 compared to the same period in 2025. New home prices saw a 0.4% annual decline. The Central district experienced the largest annual price drop at 2.7%, followed by Tel Aviv at 1.9%.
