Israel’s consumer price index falls 0.3% in May as rents for new tenants jump

Israel’s Central Bureau of Statistics said on Tuesday that the consumer price index fell 0.3% in May 2026 from April. Over the past 12 months, inflation rose 1.9%, which remains comfortably inside the government’s target range.

The monthly decline was driven mainly by lower prices for fresh fruit, down 4.9%, transportation, down 2.7%, and furniture and household equipment, down 0.1%. Offsetting those drops were increases in clothing, up 1.9%, culture and entertainment, up 1.1%, and housing, up 0.6%.

The sharpest warning came from rents. For tenants renewing existing leases, rents rose 2.5%, but for new tenants, in apartments where occupants changed, rents jumped 6.8%. The bureau noted that these figures roughly reflect annual rent changes, since most tenants do not face midyear rent adjustments because they are under fixed contracts.

Construction input prices for housing rose 0.6% in May to 103.4 points, and are up 2.2% since the start of 2026. The increase was led by labor costs, which rose 5.3% year on year, while some materials also climbed, including ready-mix concrete, sewage and drainage systems, and products for protected rooms. In contrast, other concrete products, construction steel, and nets and cages became cheaper. Industrial output prices for domestic markets fell 1.5% to 122.7 points, led by refined petroleum products, textiles, computers and electronic equipment, and food.

In the housing market, prices of transactions made in March-April 2026 were 0.3% lower than in February-March. Compared with the same period a year earlier, apartment prices fell 1.3%, while new-home prices dropped 3.9%, indicating stronger pricing pressure in the new-apartment market.