Annual inflation rate fell in July to 1.5% - the lowest in five years; slight increase in apartment prices
Annual inflation stands at 1.5%, higher than the forecast. Transport and culture became more expensive, clothing and vegetables became cheaper. Construction inputs: a slight retreat this month, but an annual increase of 3.5% amid rising labor costs. The apartment price index rose by only 0.1%; Jerusalem and Haifa climbed, the Center and Tel Aviv fell.
The Central Bureau of Statistics published the Consumer Price Index data for July 2026: the index rose by 0.3% compared to June. In annual terms (July 2026 versus July 2025), an increase of 1.5% was recorded in the index.
The most prominent price increases this month were led by the transport category, which rose by 1.4%, culture and entertainment, which contributed an increase of 1.1%, and the housing category, which rose by 0.7%. On the other hand, sharp declines were recorded in the clothing and footwear categories (-4.6%), fresh vegetables and fruits (-3.5%), and furniture and household equipment (-0.7%).
Construction input output: a slight decline amid rising labor costs
The residential construction input price index fell in July by 0.1%. The index excluding labor costs fell by 0.3%, and prices of materials and products retreated by 0.4%.
However, an annual examination shows that the construction input index climbed by 3.5% in the last 12 months - an increase attributed mainly to a 5.4% jump in labor costs paid to employees in the industry. Since the beginning of the year, the input index has risen by 2.3%.
The increases in Jerusalem and Haifa curbed the price declines in the Center and Tel Aviv
The apartment price index recorded a marginal increase of 0.1% in the months of May-June 2026, compared to the prices of transactions carried out in the months of April-May 2026. In an annual measurement, it was found that the index fell by 1.5%.
Geographically, it appears that the Jerusalem and Haifa districts are the main ones responsible for the small plus in the index. In Jerusalem, the bi-monthly index rose by 1.8% and in Haifa, by 1.5%. The peripheral districts also recorded increases: the North by 0.9% and the South by 0.7%.
Those who balanced the picture were the large districts. In the Central district, a monthly decline of 1% was recorded, and in Tel Aviv, 0.7%. The new apartment price index surprised and rose by 0.5%, so those who contributed slightly to lowering the index were second-hand apartments.
In the rent category, mixed trends were recorded according to tenant groups; for tenants who renewed a contract, an increase of 2.6% was recorded. Conversely, for new tenants (apartments where there was a tenant turnover), a sharp jump of 4.7% was recorded.
