Housing Prices Drop Sharply Led by Tel Aviv; Inflation Falls to 1.6% in June

Israel's consumer price index (CPI) remained unchanged in June 2026 compared to May, resulting in an annual inflation rate of just 1.6%, the lowest in five years and within the Bank of Israel's target range of 1% to 3%. This data was released by the Central Bureau of Statistics (CBS) on July 15, 2026. Analysts had expected a slight 0.1% decrease in the CPI.

The housing price index showed a significant 1% decline in apartment prices between April-May 2026 compared to March-April 2026, continuing a previous 0.4% drop. The steepest decreases were in the Tel Aviv district, where prices fell by 2.3%, and Jerusalem, with a 1.8% decline. On an annual basis, housing prices dropped by 2%, with new apartment prices falling by 3.9%. Regional annual declines included 3.2% in the Central district, 2.6% in Haifa, and 2.5% in Tel Aviv.

Other consumer price changes in June included notable decreases 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%). Conversely, prices rose in culture and entertainment (up 1.0%), housing costs (up 0.7%), health (up 0.6%), and food (up 0.4%). Rent prices increased by 2.6% for renewing tenants and 6.6% for new tenants.

The data reflects a broader trend of easing inflation and a cooling housing market, particularly in Tel Aviv, which is leading the price reductions. The CBS report highlights the ongoing adjustments in Israel's real estate sector and consumer prices as the economy stabilizes.