Increase in Price Index in Israel by 0.5% and Stability of Annual Inflation at 2.5%

SadaNews - The consumer price index in Israel rose by 0.5% in October, in line with expectations, while the annual inflation rate remained stable at 2.5% compared to the previous month.

Data showed a further decline in residential apartment prices by 0.3% during August and September, reinforcing estimates of a possible interest rate cut in the anticipated decision from the Bank of Israel in ten days.

According to official data, prices for several goods and services registered significant increases in October, most notably vegetables and fruits, which rose by 3.9%, clothing and footwear by 3%, and food by 1.4%.

There was also a slight increase in transportation and communications costs, health, and home maintenance, along with a minor rise in rents. Conversely, entertainment and culture prices decreased by 1.7%.

Regarding rents, the rental value for tenants who renewed their contracts rose by 2.5%, while the increase for new tenants reached 5.5%, reflecting ongoing pressures in the rental market despite a general slowdown in inflation.

The building input index for housing recorded a slight increase of 0.1% in October, reaching 100.5 points. The index rose by 5% over the last twelve months due to a significant increase in wage costs, which surged by 9.2%, against a modest rise in material prices of 2%.

Prices for some materials witnessed notable declines, especially external stone, fortified room products, and construction wood, while prices for electrical supplies rose by 1.1%.

The producer price index for the local industry increased by 0.2%, despite a 0.3% decrease in the index excluding fuel. Sharp price increases were recorded in locally produced clothes and petroleum products, against a drop in prices for machinery and equipment, base metals, electronic and electrical equipment, and industrial maintenance. The price index for the mining and quarrying sector also rose by 0.4%, although it remained low by 6.5% annually.

In the real estate market, a comparison of transactions between August and September, and between July and August, indicated a 0.3% decrease in apartment prices, with notable differences between regions.

Prices increased in Jerusalem by 0.5% and in the north by 0.3%, while they decreased in Haifa by 1.2%, in the central region by 0.9%, in Tel Aviv by 0.1%, and in the south by 0.3%. The prices of new apartments also dropped by 0.8%.

Annual comparison shows that the increase in apartment prices slowed to only 0.5%, with significant rises recorded in Jerusalem, the north, the south, and Haifa, contrasted by a continuous decline in the central region and Tel Aviv.

The annual index for new apartment prices decreased by 0.5%. The average price for apartments during the third quarter of 2025 was approximately 2.21 million shekels, reflecting a 2.5% decrease compared to the same period last year.