Israel's housing prices reach highest in 12 years alongside soaring CPI

The latest CPI statistics reveal that inflation is Israel is nowhere near plateauing.

 Finance Minister Avigdor Liberman, Interior Minister Ayelet Shaked and Zeev Elkin, Minister of Housing and Construction attend a press conference, presenting new reform on housing, at the Ministry of Finance in Jerusalem, June 12, 2022 (photo credit: YONATAN SINDEL/FLASH90)
Finance Minister Avigdor Liberman, Interior Minister Ayelet Shaked and Zeev Elkin, Minister of Housing and Construction attend a press conference, presenting new reform on housing, at the Ministry of Finance in Jerusalem, June 12, 2022
(photo credit: YONATAN SINDEL/FLASH90)

Israel’s consumer price index rose 1.1% in July, the Central Bureau of Statistics reported Monday evening, exceeding economists’ expectations of a 0.5%-0.7% increase. It marks a continuing upward trend in the cost of living, as inflation now stands at 5.2% over the past 12 months.

July’s rapidly rising CPI included sharp price increases in produce, transportation and housing, a growing concern during this period of inflation.

Israel’s population growth is the highest among OECD countries, and to meet the serious demand such a birth rate requires, a continuous rise in available housing must be maintained. The lack of housing that began during the onset of the coronavirus pandemic, coupled with global supply-chain issues brought on by the war in Ukraine, has culminated in a severe lack of homes for Israelis.

The price of housing is nearing prohibitive levels, edging many out of their comfort zones and leading several families to engage in acts of protest. In several cities, groups of people are choosing to live in tents instead of paying high rental costs. This, in particular, is an ongoing organized act of protest, which began two months ago.

''We certainly are - and you? Housing protest 2022'' (credit: ZACHY HENNESSEY)''We certainly are - and you? Housing protest 2022'' (credit: ZACHY HENNESSEY)

“We’re all suffering from the same problem,” a tent-bound protester told The Jerusalem Post in June. “People say, ‘It’ll be alright.’ It won’t. If we don’t stop this now and if we don’t actively work to make it alright, then our children will definitely not be alright. It’ll only get worse.”

It already has. As the cost of housing in July rose 1.2%, following a 15.9% rise over the previous 11 months, Israelis are left to wonder just how bad it might get.