Israel's Inflation Hits Five-Year Low in June as Housing Prices Drop 1%

Israel's Consumer Price Index (CPI) remained unchanged in June 2026 compared to May 2026, marking a significant slowdown in inflation. Over the past 12 months, from June 2025 to June 2026, the CPI increased by only 1.6%, the lowest annual inflation rate in five years. Notable price declines were recorded in fresh vegetables and fruits, which fell by 5.2%, clothing and footwear by 2.7%, transportation by 0.7%, and furniture and home equipment by 0.5%. Conversely, prices rose in culture and entertainment by 1.0%, housing by 0.7%, healthcare by 0.6%, and food by 0.4%. Rental prices increased as well, with lease renewals up 2.6% and new tenant rents rising 6.6%.

Housing prices experienced a sharp monthly decline of 1% between April and May 2026, the steepest drop in eight years, according to the Central Bureau of Statistics. The largest decreases occurred in the Tel Aviv district, down 2.3%, and Jerusalem, down 1.8%. On an annual basis, housing prices fell by 2%, mirroring declines seen in 2018 and 2023. The Central district saw a 3.2% drop, Haifa 2.6%, Tel Aviv 2.5%, and the South about 0.5%. In contrast, prices in the North rose by 1.4% and in Jerusalem by 0.3%. Prices for new apartments increased slightly by 0.1% in the surveyed month but declined 3.9% year-over-year.