Interest rate effect? Apartment prices rise again, inflation restrained

The Consumer Price Index rose by 0.7% in August, with annual inflation remaining at 1.5%. Apartment prices increased by 0.2% for the second consecutive month, led by Tel Aviv and the central region. Rent rose by 2.6% for contract renewals and 4.4% for new tenants. Fresh vegetables and transportation led the increases, while fruits and clothing declined.

The Consumer Price Index rose by 0.7% in August 2026, at the low end of analyst expectations. Annual inflation remained at 1.5%, near the lower bound of the Bank of Israel's target range (1%-3%). Apartment prices increased by 0.2% for the second consecutive month, led by the Tel Aviv district (0.7%) and the central district (0.3%). Rent rose by 2.6% for tenants renewing contracts and 4.4% for new tenants. Fresh vegetables (2.9%) and transportation (2.7%) led the index increases. Fresh fruits fell by 2.0% and clothing by 0.8%. On an annual basis, the apartment price index declined by 1.2%. The article notes that subsidized transactions (price-targeted) pulled up new apartment prices, which rose by 0.5% compared to 0.4% excluding the subsidy. For the first time, the Central Bureau of Statistics included a quarterly change in second-hand apartment prices in the index, which fell by 1.2% in the second quarter.