Consumer Price Index Drops 0.1%, Annual Inflation Slows Sharply
Translated & summarized from Walla by baba
Israel's Consumer Price Index fell by 0.1% in October, causing the annual inflation rate to drop to 1.1%. This decline was driven by lower prices for fresh produce and transportation, though clothing and vegetables saw increases. Meanwhile, housing prices experienced their longest annual decline in a decade, falling 1.5% year-over-year, with the average national home price decreasing to approximately NIS 2.29 million in the third quarter.
The story in 5 lines · by baba
- Israel's annual inflation rate fell to 1.1% in October, down from 1.6%.
- The Consumer Price Index decreased by 0.1% in October.
- Housing prices saw their longest annual decline in a decade, down 1.5%.
- Rent prices increased by 2.8% for renewals and 5.5% for new tenants.
- The average national home price dropped to approximately NIS 2.29 million in Q3 2026.
Israel's Consumer Price Index (CPI) saw a 0.1% decrease in October, leading to a significant slowdown in the annual inflation rate. The yearly inflation rate dropped from 1.6% to 1.1%, nearing the lower bound of the government's target range of 1%-3% and well below the central target of 2%. Notable price decreases were observed in fresh fruits (down 2.8%), transportation (down 1.4%), and owner-occupied housing services (down 0.5%). Conversely, prices rose in clothing and footwear (up 4.1%), fresh vegetables (up 3.5%), apartment maintenance (up 0.4%), and home furniture and equipment (up 0.3%).
Rent prices continued to climb, with a 2.8% increase for lease renewals and a 5.5% rise for new tenants in apartments with tenant turnover. These figures approximate the annual change in rent, as most leases are fixed for the year.
Separately, the Central Bureau of Statistics reported that overall housing prices, including new and existing homes, decreased by 0.2% in August-September 2026 compared to July-August 2026. On an annual basis, housing prices fell by 1.5% compared to August-September 2025, marking the longest period of annual price declines in the last decade. Monthly price drops were recorded in Tel Aviv (0.8%), the South (0.6%), and the Center (0.2%), while Jerusalem remained stable and the North and Haifa saw increases.
New apartment prices fell 0.7% monthly and 0.2% annually. Nationally, the average transaction price for a home in the third quarter of 2026 was approximately NIS 2.29 million, a 5.7% decrease from the previous quarter and a 1.5% drop from the same quarter last year. Tel Aviv had the highest average price at NIS 3.46 million, while the North had the lowest at NIS 1.5 million.
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