The Consumer Price Index surprisingly rose negatively by 1.1% in July 2022 – this is what the Central Bureau of Statistics announced this evening (Monday). In doing so, the rate of inflation in Israel rose to 5.2% during the last 12 months – above the target range of the Bank of Israel by more than 2%.
The July index far exceeds the early forecasts of market economists, who expected an increase of 0.5% to 0.7%.
Notable price increases were recorded in the sections: fresh fruit, which increased by 8.5%; Transportation, which increased by 3.3%; housing, which increased by 1.2%; culture and entertainment, which increased by 1.2%; and variance, which increased by 1.0%. On the other hand, notable price decreases were recorded in the clothing and footwear section, which decreased by 4.0%.
The rent section without public rent increased by 0.6%. The CBS states that approximately 86% of the tenants are under an existing contract, so the index for them remains almost unchanged. For the 10% of tenants who renewed a contract, an increase of approximately 3.5% was recorded. For 4% of the tenants (apartments in the sample where there was a change of tenant) An increase of about 7% was recorded.
Meanwhile, the residential construction input price index rose by 0.5% in July. In the last 12 months (July 2022 vs. July 2021), the residential construction input price index rose by 6.8%.
Notable price increases were recorded in the “Materials and Products – Total” section, which increased by 0.9%. It should be noted that in this section the prices of imported concrete (4%), mortar (3.3%), sand of all types (3.2%) and air conditioning (3%) became more expensive. In contrast, the prices of conductors fell by 5.0%, wood for construction by 3.4% and iron nets by 2.9%.
Housing prices increased by 17.8% per year
Even in the month of July, housing prices continued to climb despite the reports of a decrease in the pace of apartment sales and the taking of mortgages. From the comparison of the prices of the transactions carried out in the months of May-June 2022 compared to the prices of the transactions carried out in the months of April-May 2022, it was found that the prices of the apartments increased by 2%, thus completing an increase of 17.8% compared to the corresponding period last year (May-June 2021). It should be noted that this is the highest annual price increase in a decade.
In the segmentation of apartment price changes by districts in the months of May-June 2022 compared to the months of April-May 2022, price increases were recorded in all districts: Jerusalem 3.0%, North 2.6%, Haifa 2.3%, Center 1.7%, Tel Aviv 2.0% and South 1.0%. Compared to the corresponding period last year, May-June 2022, compared to May-June 2021, price increases were recorded in all districts: Central (20.5%), Jerusalem (18.3%), Tel Aviv (17.6%), Haifa (16.4%), North (14.6 %) and South (14.3%).
In the new apartment price index, it was found that their prices increased by 2.1% in the months of May-June 2022 compared to the months of April-May 2022, completing a 17.5% increase compared to the corresponding period last year (April-May 2021). The percentage of transactions that were carried out with government support and participated in the calculation is 26.8% compared to 28.5% in the previous period (April-May 2021).