Israeli Consumer Prices Fall Unexpectedly in October, Housing Costs Decline
Translated & summarized from Kikar HaShabbat by baba
Israel's consumer price index unexpectedly fell by 0.1% in October 2026, contrary to predictions of an increase. Housing prices continued to decline, with a 0.2% monthly drop and a 1.5% annual decrease. However, construction input prices rose 0.4% due to increased labor costs, and industrial output prices jumped 1.9%, largely due to petroleum products.
The story in 5 lines · by baba
- Israel's consumer price index fell 0.1% in October 2026, surprising forecasters.
- Residential property prices decreased by 0.2% monthly and 1.5% annually.
- Construction input prices rose 0.4% in October, driven by wage increases.
- Industrial output prices surged 1.9% in October, mainly due to petroleum products.
- Clothing and footwear prices increased by 4.1% in October.
Israel's Central Bureau of Statistics reported that the consumer price index (CPI) decreased by 0.1% in October 2026, defying earlier forecasts of a 0.5% increase. Despite the overall drop, certain goods saw price hikes, with clothing and footwear rising 4.1% and fresh vegetables up 3.5%. Conversely, fresh fruit prices fell 2.8%, transportation costs dropped 1.4%, and owner-occupied housing services decreased by 0.5%.
In the housing market, the index of residential building input prices rose 0.4% in October, reaching 104.4 points. This increase is attributed largely to a 5.2% annual rise in construction sector wages. The price of materials and products saw a monthly increase of 0.1%, with notable rises in blocks (2.1%), nets and cages (1.3%), and construction rebar (1.2%).
Meanwhile, the index of residential property prices continued its downward trend, falling 0.2% in September compared to August. Significant drops were observed in the Tel Aviv and Haifa districts, each experiencing a 0.8% decrease. Annually, property prices declined by 1.5% in September compared to the previous year, with Tel Aviv seeing a 2.1% drop. The average price of a home in Israel during the third quarter of 2026 was approximately 2.29 million shekels, a 1.5% decrease from the same period in 2025.
Industrial output prices also saw a substantial increase in October, with the index for domestic destinations rising 1.9% from September, primarily driven by a 16.5% surge in refined petroleum product prices. Excluding fuels, there was no change in the index. Annually, industrial output prices rose 5.1%, with a more modest 0.9% increase when excluding fuels. Basic metals prices also increased by 1.5%.
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