Israel's Consumer Price Index Rises Moderately in July Amid Mixed Housing Market Trends
Translated & summarized from Srugim by baba
Israel's consumer price index rose by 1.5% over the past year to July 2026, with housing costs increasing moderately. Rent hikes were significant at lease renewals and turnovers, while the housing market showed regional price variations. Construction input costs and industrial prices declined, helping to moderate inflation.
The story in 6 lines · by baba
- Israel's consumer price index rose 1.5% from July 2025 to July 2026.
- Housing prices increased 0.7% annually, with rent hikes of 2.6% for renewals and 4.7% for new tenants.
- Monthly housing prices rose 0.1%, with regional increases in Jerusalem, Haifa, north, and south.
- Annual housing prices fell 1.5% overall, with declines in central Israel, Haifa, and Tel Aviv.
- Average home price in Q2 2026 was 2.435 million shekels, up 7.9% year-over-year.
- Construction input costs fell 0.1% in July but rose 3.5% annually, driven by labor cost increases.
The Israeli Central Bureau of Statistics released the consumer price index (CPI) data for July 2026, showing a modest 1.5% increase over the past twelve months compared to July 2025. Key price rises were recorded in transportation (up 1.4%), culture and entertainment (up 1.1%), and housing (up 0.7%). Significant price drops helped temper inflation, with clothing and footwear prices falling by 4.6%, fresh fruits and vegetables by 3.5%, furniture and home equipment by 0.7%, and miscellaneous items by 0.4%.
Despite tenant protections against rent fluctuations during lease terms, rents increased notably at contract renewal and turnover points: renewing tenants faced a 2.6% rent increase, while new tenants experienced a 4.7% jump. The housing market, not included in the CPI, showed mixed results in monthly and annual analyses. From May-June 2026 compared to April-May 2026, housing prices rose slightly by 0.1%, with regional increases in Jerusalem (1.8%), Haifa (1.5%), the north (0.9%), and the south (0.7%), while the central district and Tel Aviv saw declines of 1.0% and 0.7%, respectively. New home prices increased by 0.5% monthly.
Year-on-year, the general housing price index fell by 1.5%, and new housing prices dropped by 2.0%. The largest annual declines were in the central district (4.1%), Haifa (1.8%), and Tel Aviv (1.7%), whereas Jerusalem (1.8%), the north (1.6%), and the south (0.1%) experienced price rises. The average national home price in Q2 2026 was 2.435 million shekels, marking a 7.9% increase from the same quarter in 2025.
Residential construction input costs slightly decreased by 0.1% in July to 103.5 points but rose 3.5% over the past year, mainly due to a 5.4% surge in labor costs. Industrial output prices for local destinations dropped 1.2% in July, driven by a 12% fall in refined petroleum product prices, with a 0.5% annual decline. The mining and quarrying index also saw a sharp annual decrease of 5.4%.
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