Israel's Inflation Drops to 1.1% Amid Falling Housing Prices and Rising Rents
Translated & summarized from Behadrei Haredim by baba
Israel's annual inflation rate has decreased to 1.1% as of October, with the CPI falling 0.1% monthly due to lower prices in fruits, transport, and housing services. Housing purchase prices have declined 1.5% year-over-year, though rental costs have increased by an average of 2.8% for contract renewals and 5.5% for new tenants. Construction input costs rose 0.4% in October, and industrial producer prices increased 1.9%.
The story in 6 lines · by baba
- Israel's annual inflation rate dropped to 1.1% in October.
- Housing purchase prices decreased by 1.5% year-over-year.
- Rental costs rose by an average of 2.8% for contract renewals.
- New tenants faced a 5.5% average increase in rent.
- Construction input prices rose 0.4% in October.
- Industrial producer prices jumped 1.9% due to fuel costs.
Israel's annual inflation rate has fallen to 1.1% as of October, according to data released by the Central Bureau of Statistics. The consumer price index (CPI) saw a monthly decrease of 0.1% in October, primarily driven by lower prices for fresh fruits (down 2.8%), transportation (down 1.4%), and owner-occupied housing services (down 0.5%). Conversely, clothing and footwear prices surged by 4.1%, and fresh vegetables rose by 3.5%.
The real estate market is showing signs of cooling, with the housing price index dropping by 0.2% in August-September compared to July-August. New apartment prices decreased by 0.7%. Annually, housing prices have fallen by 1.5%, with the most significant drops observed in the Tel Aviv (2.1%) and Central (2.0%) districts, while Haifa saw a slight annual increase of 0.3%.
The average price of an apartment in Israel during the third quarter was approximately 2.29 million shekels, a 1.5% decrease from the same period last year. Significant price disparities persist between cities, with Tel Aviv's average exceeding 4.6 million shekels, while Beersheba's averaged around 1.28 million shekels.
Despite the decline in purchase prices, rental costs continue to rise. Renters renewing existing contracts experienced an average increase of 2.8%, while new tenants moving into apartments with previous occupants faced a steeper rise of 5.5%. Meanwhile, the construction input price index increased by 0.4% in October, reaching a 3.9% annual rise, largely due to a 5.2% increase in labor costs. The producer price index in industry jumped by 1.9%, influenced by a 16.5% surge in refined petroleum product prices, though it remained unchanged when excluding fuel.
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