Israel’s annual inflation rate fell to 1.6% in June after the country’s consumer price index remained unchanged during the month, the Central Bureau of Statistics reported Wednesday.
The consumer price index measures changes in the cost of a basket of goods and services purchased by households. Because the index rose by 0.3% in June 2025, the flat reading this June pushed the annual inflation rate lower.
(Photo: Alex Kolomoisky)
The decline had already been reflected in the Bank of Israel’s latest interest-rate cut. As a result, another reduction is not expected at the central bank’s next policy decision on Aug. 31.
Prices rose in several major categories during June. Culture and entertainment increased by 1%, housing by 0.7%, health by 0.6% and food by 0.4%.
The largest declines were recorded in fresh fruit and vegetables, which fell by 5.2%, followed by clothing and footwear at 2.7%, transportation at 0.7% and furniture and household equipment at 0.5%.
Rent data continued to show a sharp gap between existing and new tenants.
Tenants who renewed their leases faced an average rent increase of 2.6%, while rents for homes where the tenant changed rose by 6.6%.
The bureau said those figures approximate the annual change in rent for the two groups. For most tenants, monthly rent does not change during the year because they remain covered by fixed-term contracts, usually without indexation mechanisms.
Home prices fall 1%
Separate housing-market data showed that apartment prices fell by 1% in transactions completed in April and May 2026 compared with transactions in March and April.
Compared with the same period a year earlier, home prices fell by 2%.
On a regional basis, prices declined by 2.3% in Tel Aviv, 1.8% in Jerusalem, 0.5% in Haifa and 0.3% in northern Israel. Prices were unchanged in central and southern Israel.
Compared with a year earlier, prices fell by 3.2% in central Israel, 2.6% in Haifa, 2.5% in Tel Aviv and 0.5% in the south.
Prices rose by 1.4% in northern Israel and 0.3% in Jerusalem.
New-home prices down 3.9% annually
Prices of newly built homes fell by 0.1% in April and May compared with the previous two-month period.
Government-subsidized purchases accounted for 37.5% of new-home transactions, up from 34.6% in March and April.
Excluding subsidized transactions, prices of new homes rose by 0.2%.
Compared with the same period a year earlier, however, new-home prices fell by 3.9%.