In September 2024, the consumer price index (CPI) saw a decrease of 0.2%, contrary to economists' predictions of a 0.1% increase, according to the Bank of Israel. This decline marks a notable shift, as the CPI has risen by 3.5% over the past year, from September 2023 to September 2024. Significant price drops were observed in various categories, including transportation (-2.6%), culture and entertainment (-1.3%), clothing and footwear (-1.2%), and fresh fruit (-1.1%). However, fresh vegetables saw a sharp increase of 6.7%, alongside educational services (1.3%) and furniture and home equipment (0.6%).
Despite the overall decrease in the CPI, rental prices continue to rise, with a 2.4% increase for tenants renewing contracts and a 4.1% increase for new tenants. This trend reflects a broader issue in the housing market, where the input price index for residential construction rose by 0.4% in September 2024, indicating ongoing inflationary pressures in the sector.
In the housing market, apartment prices increased by 0.3% when comparing transactions from July-August 2024 to those from June-July 2024. Notably, the prices of new apartments rose by 1.3%. An annual comparison shows that from July-August 2023 to July-August 2024, the apartment price index surged by 6.3%, with significant increases across various districts, particularly in Haifa (10.2%) and Central (8.8%).
- Dr. Davey Dishtnik, a senior faculty member at Tel Aviv University, remarked on the surprising nature of the September CPI results, emphasizing that early forecasts expected inflation rates between 0% to 0.2%. Despite the positive news in September, the annual inflation rate remains above the Bank of Israel's target of 3%, and projections suggest it could exceed 4% in early 2025 before beginning to decline.
- The ongoing challenges in the housing market and rising rental costs continue to be a concern for many residents, as these trends can impact overall economic stability and consumer spending.
