Israel CPI falls 0.5% in September; housing prices down 0.6%

Israel's consumer price index fell 0.5 percent in September 2026 compared to August, the Central Bureau of Statistics reported Thursday evening, while the housing price index dropped 0.6 percent in the July–August period compared to the previous two months. The annual inflation rate now stands at 1.6 percent, measured from September 2025 to September 2026.

The housing data, which tracks transactions completed in July and August, showed prices of new apartments down 0.4 percent over the two-month period. By region, Haifa was the only district to record an increase, rising 0.4 percent, while all other districts saw declines. The North led the drop at 1.5 percent, followed by Tel Aviv (0.9 percent), the Center (0.7 percent), Jerusalem (0.3 percent), and the South (0.1 percent).

Housing price index (Photo: Central Bureau of Statistics)

Year-on-year, housing prices in July–August 2026 were 1.8 percent lower than in the same period of 2025. Every district recorded an annual decline: the Center fell 2.7 percent, Tel Aviv 1.9 percent, the South 1.5 percent, Haifa 1.4 percent, the North 0.8 percent, and Jerusalem 0.2 percent. New apartment prices were down 0.4 percent annually.

Broad deflation across consumer sectors

The September consumer price index showed sharp declines in several categories: culture and entertainment fell 2.7 percent, transportation dropped 2.5 percent, clothing and footwear were down 0.9 percent, and food, furniture, and household equipment each declined 0.4 percent. The steepest increases were in fresh vegetables, which rose 6.6 percent, education services, up 0.8 percent, and rent, which climbed 0.4 percent.

The combination of falling prices and low annual inflation, well below the Bank of Israel's target range of 1 to 3 percent, has fueled speculation that Governor Amir Yaron may lower the benchmark interest rate at the next monetary policy decision.