Israel's Consumer Price Index (CPI) rose 0.6% in January according to figures released by the Central Bureau of Statistics today. The rise was expected, with analysts predicting a 0.5%-0.6% rise after the CPI had fallen 0.3% in December 2024, bringing inflation down to 3.2%. Inflation remains well above the upper limit of the Bank of Israel's annual target range of 3%.
Estimates are that the January CPI was exceptional due to government tax hikes and that the Bank of Israel will not be panicked into raising the interest rate to fight inflation.
In addition to a VAT hike from 17% to 18% at the start of January and other tax hikes, there were also price raises in electricity, water, and local authority taxes (arnona).
Rising home prices in Israel
The Central Bureau of Statistics has also published the change in home prices (which are not part of the general CPI) between October-November 2024 and November-December 2024. On average, prices rose 0.4%, after rising 0.6% the previous month. In the breakdown by region, prices rose by 1.2% in Jerusalem, 1.2% in the north, 0.3% in Haifa, and fell by 0.1% in the center but rose 0.6 % in Tel Aviv and 0.3% in the south. Prices of new apartments rose 0.7%.
In the comparison between November-December 2024 and November-December 2023, the index of housing prices rose 7.3%. In the breakdown by region, prices rose by 11.1% in Haifa, 9.4% in Tel Aviv, 9.2% in the north, 5.7% in the central region, 4.9% in the south, and 3.1% in Jerusalem. Prices of new apartments have risen by 4.4% over the past year.