Consumer Prices Drop 0.5% in September, Annual Inflation at 1.6%
Translated & summarized from Arutz Sheva by baba
Consumer prices in Israel dropped by 0.5% in September 2026, with annual inflation reaching 1.6%. While transportation and entertainment costs decreased, fresh vegetable prices and rents saw significant increases. Apartment prices nationwide fell by 1.8% year-over-year, with the Central district experiencing the largest decline. Construction input prices, however, rose by 3.6% annually, driven by labor costs.
The story in 6 lines · by baba
- Consumer prices fell 0.5% in September 2026, with annual inflation at 1.6%.
- Apartment prices decreased by 1.8% year-over-year across Israel.
- Rental costs continued to rise, with new tenants facing a 5.3% increase.
- Fresh vegetable prices surged 6.6% in September.
- Construction input prices rose 3.6% annually, driven by labor costs.
- Transportation and entertainment costs saw significant monthly decreases.
Consumer prices in Israel fell by 0.5% in September 2026, bringing the annual inflation rate for the preceding 12 months to 1.6%, according to data released by the Central Bureau of Statistics. Significant price decreases were observed in transportation, culture and entertainment, and clothing and footwear. However, fresh vegetable prices surged by 6.6%, and rental costs continued to climb.
The monthly price drop was primarily driven by a 2.7% decrease in culture and entertainment costs, a 2.5% fall in transportation, and a 0.9% reduction in clothing and footwear. Food and home furnishings also saw a 0.4% decline each. In contrast, education services increased by 0.8%, and rent rose by 0.4%.
Despite the overall decrease in the consumer price index, the rental market data indicates ongoing price hikes. Tenants renewing leases faced an approximate annual rent increase of 2.4%, while rents for apartments with new tenants rose by 5.3%. The Bureau noted these figures reflect the approximate annual change in rent for these groups, as most tenants maintain fixed rates throughout their contracts.
In the housing market, apartment prices decreased by 0.6% in transactions during July-August 2026 compared to June-July. The sharpest monthly decline was in the Northern district, at 1.5%, followed by Tel Aviv at 0.9%, the Center at 0.7%, Jerusalem at 0.3%, and the South at 0.1%. The Haifa district was the only region to see a price increase, up 0.4%.
Year-over-year, apartment prices nationwide fell by 1.8%, with decreases recorded across all districts. The most significant annual drop was in the Central district, at 2.7%, followed by Tel Aviv at 1.9%. New apartment prices declined by 0.4% both monthly and annually. It is important to note that the housing price index is not included in the consumer price index.
Concurrently, the index for input prices in residential construction rose by 0.1% in September, completing a 3.6% increase over the past 12 months. This annual rise was mainly due to a 5.3% increase in construction labor costs. Among building materials, iron prices increased by 3.1%, and mesh and cages rose by 3%, while plaster and render prices fell by 2.9%. The producer price index for industrial output for the domestic market also increased by 0.8% in September, attributed partly to higher prices for clothing, metals, and refined petroleum products. The data suggests a moderation in the overall price increase rate in the economy and a decrease in housing prices, alongside continued increases in rental costs and construction expenses.
