October Inflation Drops Unexpectedly, Housing Prices Continue Decline
Translated & summarized from Calcalist by baba
Israel's inflation rate fell to 1.1% in October, with the CPI dropping 0.1%, surprising analysts who expected an increase. Housing prices also continued their decline, falling 0.2% in August-September, marking the longest downward trend in a decade. Significant price drops were seen in fruits and transportation, while clothing and vegetables saw increases. The average apartment price nationwide decreased by 5.7% in the third quarter.
The story in 6 lines · by baba
- Israel's annual inflation rate dropped to 1.1% in October, the lowest since April 2021.
- The Consumer Price Index unexpectedly fell by 0.1% in October.
- Housing prices decreased by 0.2% in August-September, continuing a decade-long trend.
- Fresh fruit and transportation costs saw significant price drops in October.
- Clothing and footwear prices increased by 4.1% in October.
- The average apartment price nationwide fell 5.7% in the third quarter.
Israel's Consumer Price Index (CPI) for October unexpectedly fell by 0.1%, bringing the annual inflation rate down to 1.1%, the lowest level since April 2021. Analysts had predicted a 0.3% rise in the index and an annual inflation rate of 1.5%. This follows a 0.5% decrease in the CPI in September, when annual inflation stood at 1.6%.
Significant price drops were observed in fresh fruits (down 2.8%), transportation (down 1.4%), and owner-occupied housing services (down 0.5%). Conversely, notable price increases occurred in clothing and footwear (up 4.1%), fresh vegetables (up 3.5%), apartment maintenance (up 0.4%), and furniture and household equipment (up 0.3%).
In parallel, the Central Bureau of Statistics reported that housing prices, which are not included in the CPI, decreased by 0.2% in August-September 2026 compared to July-August. This continues a downward trend, following a 0.7% drop in the previous two-month period. Year-over-year, housing prices fell by 1.5% in August-September.
The current wave of declining housing prices began in December 2025 and marks the longest continuous drop in the last decade. Prices have fallen for five consecutive months since August 2023. Regional data shows price decreases in Tel Aviv (down 0.8%) and the South (down 0.6%) during August-September 2026. However, prices rose in the North (up 0.4%) and Haifa (up 0.8%), with no change in Jerusalem.
The average price of an apartment sold in the third quarter was approximately NIS 2.29 million, a 5.7% decrease from the previous quarter. In Tel Aviv, the average price in the third quarter was NIS 3.5 million, an increase of 5.3% compared to the same period in 2025. The North region had the lowest average apartment price at about NIS 1.5 million, a 2.9% decrease. Nationally, the average price of a home in the third quarter was NIS 2.29 million, down 5.7% from the prior quarter.
