14-year high in inflation; Apartment prices increased by 17.8% in the last year Israel today

The consumer price index rose in July 2022 by 1.1%, much higher than the economists' early predictions of 0.7%.

In the last twelve months (July 2022 vs. July 2021), the consumer price index rose by 5.2% - this is a record since 2008.

And another negative record was broken: despite the early estimates, the rate of increase in apartment prices did not slow down, but rather accelerated: apartment prices jumped by 17.8% in the last 12 months ending in June.

Let's recall that in May apartment prices rose at an annual rate of 15.9%, and in the real estate market it was expected that the rate of increase would moderate due to the decrease in the number of transactions in the real estate market and the slowdown in the scope of taking out mortgages.

According to the CBS, notable price increases were recorded in the categories of 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 miscellaneous which increased by 1.0%. Notable price decreases were recorded in the section Clothing and footwear which decreased by 4.0%. 

The rent section without public rent increased by 0.6%.

The CBS states that approximately 86% of the renters are under an existing contract, so the index for them remains almost unchanged. For the 10% of renters who renewed a contract, an increase of about 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.

The residential construction input price index increased by 0.5% in July 2022. In the last twelve months (July 2022 compared to July 2021), the residential construction input price index increased by 6.8%.

Notable price increases were recorded in the section "Materials and products - total" which increased by 0.9%.

It should be noted that in this section the prices of imported concrete increased by 4.0%, mortar by 3.3%, sand of its types by 3.2% and air conditioning by 2.3%.

In contrast, the prices of conductors fell by 5.0%, wood for construction by 3.4% and iron nets by 2.9%.

Apartment prices increased by 17.8% in the last year.

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 2.0% and thus completed 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 an increase of 17.5% 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).

In the second quarter of 2022, the average price nationwide was NIS 1,880.9 thousand, an increase of 4.4% compared to the average price in the previous quarter (NIS 1,801.6 thousand).

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