Israel’s Consumer Price Index (CPI) fell by 0.5% in November - annual inflation is 2.4%

Israel’s Consumer Price Index (CPI) fell by 0.5% in November, bringing annual inflation down to 2.4%, compared with 2.5% in October, the Central Bureau of Statistics (CBS) reported on Monday. The figure was in line with early market forecasts, reinforcing expectations of a gradual—but incomplete—cooling in price pressures.

The data point to continued success in restraining inflation, even as wages rise and economic growth remains steady. However, economists say the moderation is not yet sufficient to justify a near-term reduction in interest rates.

Sharp Declines in Produce, Transport and Leisure

November saw notable price declines across several major categories:

• Fresh fruits and vegetables: −4.1%

• Culture and entertainment: −2.5%

• Transportation and communications: −1.6%

• Furniture and household equipment: −1.1%

These decreases were the main drivers of the overall CPI decline.

By contrast, food prices rose by 0.4%, partially offsetting the broader downward trend.

Rents Continue to Climb

Housing-related costs remain a source of inflationary pressure. According to the CBS:

• Tenants renewing contracts saw rents rise by 2.8%

• New tenants (apartments with tenant turnover) experienced a sharper increase of 4.7%

The rent data underscore the ongoing tension in the housing market, even as broader inflation eases.

Outlook: Inflation Tamed - Not Defeated

The November CPI delivers a mixed message for policymakers. On one hand, there are no signs of renewed inflation, despite rising wages and solid economic activity. On the other, inflation remains above levels that would justify further monetary easing.

As a result, economists broadly agree that the Bank of Israel is unlikely to cut interest rates in the near term, with expectations pointing to policy stability at least until early 2026. The coming months are likely to be characterized by caution and data-dependence rather than decisive moves.

Housing Prices Fall Eighth Consecutive Report

Apartment Prices Down 0.5% in September–October

Alongside the CPI, the CBS published its latest housing price survey for September–October, showing a 0.5% decline compared with August–September. This marks the eighth consecutive period of falling prices, extending a downward trend that began in February.

Since then, cumulative housing prices have fallen by 2.6%.

Annual Comparison Shows Real Price Decline

On a year-over-year basis (September–October 2025 versus the same period in 2024), apartment prices edged up by just 0.1%. In real terms, however, this represents a decline, as the CPI rose by 2.5% over the same period.

In effect, homes are selling today at roughly last year’s nominal prices, but at a lower real value.

New Apartments See Steeper Price Drops

The pressure on developers is particularly evident in the new-apartment market:

• Prices for new homes fell by 1.4% compared with the previous period.

• 44.6% of transactions in September–October were conducted under government-subsidized programs such as discounted housing schemes.

• By comparison, only 36.8% of transactions fell under such programs in August–September.

The higher share of subsidized sales—often priced hundreds of thousands of shekels below market value—has contributed to the overall decline in average prices.

Regional Breakdown: Jerusalem Stands Out

Price movements varied significantly by region:

September–October vs. August–September

• Jerusalem: +1.4%

• South: −2.1%

• Tel Aviv: −1.1%

• Haifa: −0.6%

• Center: −0.4%

• North: −0.2%

Year-over-Year Comparison

• Tel Aviv District: −2.9%

• Central District: −2.7%

• Jerusalem District: +8.9%

• North District: +5.5%

• Haifa District: +1.2%

• Southern District: +0.5%

November’s data confirm that inflation is easing but not yet beaten, while the housing market continues to cool, particularly outside Jerusalem. For consumers, this means some relief in everyday prices—but higher rents and steady interest rates will likely remain part of the economic landscape for months to come.