Housing Prices Resume Climb After Months of Decline; - Inflation Drops to Five-Year Low

Housing prices in Israel have returned to an upward trajectory after eight consecutive months of mostly moderate declines, according to data published Sunday by the Central Bureau of Statistics.

The housing price index rose 0.4% over 2025 as a whole, while prices increased by 0.8% in November–December compared with the previous two-month period. In October–November, a surprising 0.6% rise was recorded — signaling a renewed 

Contractors Hold Prices Despite Falling Sales

The Mortgage Advisors Association said the current inflation environment opens the door to a more expansionary interest rate policy. “The main discussion now is not whether a rate cut will occur in the upcoming decision, but by how much,” the association said, adding that declining market anchors are expected to further ease mortgage financing costs.

The housing input index, to which portions of new apartment buyers’ debts are linked, remained relatively stable, rising just 0.1%.

The Bank of Israel is scheduled to announce its next interest rate decision on Monday, February 23. Following two consecutive cuts that brought the benchmark rate to 4%, some analysts expect a third reduction in light of the sharp drop in inflation, while others predict the central bank will opt for a more cautious approach.