Full Breakdown
Israel’s July 2026 Consumer Price Index Shows Modest Rise Amid Housing and Rental Shifts
8/15/2026, 8:23:43 AM
Inflation Overview – July 2026
The Consumer Price Index (CPI) rose 0.3 % in July compared with June, driven primarily by seasonal summer demand and higher transportation and leisure costs. Annual inflation stood at 1.5 %, according to the Central Bureau of Statistics (CBS). Within the index, transportation prices increased 1.4 % and culture-and-entertainment costs rose 1.1 %, while clothing and footwear fell 4.6 % and fresh fruit and vegetables declined 3.5 %.
Rental Market Movements
CBS data indicate that rents continued to climb, especially for new leases. Tenants renewing existing agreements saw rents rise 2.6 %, whereas new tenants faced a sharper 4.7 % increase. The bureau notes that these figures approximate annual rent changes for the two groups because most rental contracts remain unchanged during their term.
Manufacturing Output Price Index
The Manufacturing Output Price Index for the domestic market fell 1.2 % in July, a decline led by a 12 % drop in refined petroleum product prices and reductions in basic metals and furniture. On an annual basis the index slipped 0.5 %. Excluding fuels, the index was unchanged from the previous month.
Home and New-Home Price Trends
The Home Price Index, covering new and existing homes, rose 0.1 % from May-June 2026 but fell 1.5 % year-over-year. District-level changes showed price gains in Jerusalem (+1.8 %), Haifa (+1.5 %) and the North (+0.9 %), with declines in the Central (-4.1 %) and Tel Aviv (-1.7 %) districts.
The New Home Price Index increased 0.5 % month-on-month; excluding government-subsidized sales, the rise was 0.9 %. Subsidized transactions accounted for 38.4 % of sales, up from 36.4 % previously. Annually, new-home prices fell 2 %, while over the past five years they have risen 26.2 % compared with a 30.6 % increase for all homes. In the second quarter of 2026 the average home price nationwide was NIS 2.435 million, up 3.7 % from the prior quarter and 7.9 % from the same quarter a year earlier. Tel Aviv recorded the highest average price at NIS 4.5535 million; Beersheba was the lowest at NIS 1.2362 million.
Broader Implications
Seasonal demand and higher transport and leisure costs lifted the CPI modestly, while falling fuel prices pulled manufacturing output prices down. The continued rise in rents—especially for new tenants—combined with modest home-price gains and a decline in annual housing inflation, suggests mixed pressures on household affordability across Israel’s regions.
