Israel's Housing Prices Drop 1% in Two Months as Annual Inflation Eases

The Israeli Central Bureau of Statistics released the consumer price index for June, revealing a 1% decline in housing prices based on transactions from April to May 2026 compared to the preceding period. On an annual basis, housing prices fell by 2.0% compared to the same period last year. The overall consumer price index for June remained unchanged, continuing the trend of slowing inflation in the economy.

Detailed sector analysis showed price increases in culture and entertainment by 1.0%, housing costs by 0.7%, health by 0.6%, and food by 0.4%. Conversely, significant price drops occurred in fresh fruits and vegetables (down 5.2%), clothing and footwear (down 2.7%), transportation (down 0.7%), and furniture and home equipment (down 0.5%).

Regarding rent, tenants renewing leases experienced a 2.6% increase, while new renters faced a 6.6% rise. However, these figures approximate annual changes since most rental contracts lack adjustment mechanisms during their terms. The residential construction input price index rose by 0.2% in June, reaching 103.6 points, with a 2.4% increase since the start of the year and a 3.7% rise annually, mainly due to a 5.5% wage increase in the sector.

Producer price indices for local industrial output declined by 0.8% in June, largely driven by a 9.8% drop in refined petroleum product prices. The mining and quarrying price index for local markets fell by 1.0% in June and decreased by 8.8% annually.