The Central Bureau of Statistics (CBS) released a report on Tuesday, which showed that there was an almost 20% increase in housing prices in Israel in the last year.
It also said that this was an annual record. Likewise, there has also been a rise in the cost of consumer goods in the country.
It was in the second half of 2018 that housing prices had first begun to climb in Israel. CBS revealed statistics showing that from August to September this year, there was s 19.8% increase in housing prices as opposed to the same period last year.
This is the biggest increase recorded year-on-year in recent times. Moreover, it comes amidst a decline in demand for houses, considering the higher interest rates and costs.
It is also completely opposite of the global housing markets that have seen their prices fall, or slow down at the very least.
As of October, the Israeli central bank had increased the interest rate to 2.75% in its fight against inflation and for dampening the housing market as well.
The bank is expected to reassess the interest rate this month.
Another report was published by CBS on consumer goods and their prices on Tuesday. It showed that there was a 0.6% rise in cost of consumer goods in October, as opposed to the previous month.
This means that there has been an annual increase of 4.9% in the cost of consumer goods in 2022. The Consumer Price Index (CPI) is used for calculating inflation.
The CPI is calculated using the average prices of household goods like transportation, clothing and food. Data showed that inflation was 5.1% in the last 12 months, as opposed to October last year.
This was significantly higher than the 1% to 3% range set by the Bank of Israel.
The report for October shows that there was a 4.1% increase in the price of fresh fruit and vegetables, while a 4% rise was seen in footwear and clothing and price for transport went up by 0.6%.
Meanwhile, there was a slight decline in prices of household items, health services, culture and entertainment events and furniture.
As far as the education sector is concerned, there was a 3.2% increase in tuition as compared to last year.
Excluding vegetables and fruit, the food sector saw a rise in prices of 1%. This included things like rice, milk and oil.
However, prices of others like fish, poultry and meat went up by 2.3% in the last month.
This week, Tnuva, a leading food manufacturer in Israel, announced that it would hike prices of numerous products, with the rise to be around 4.7%.
The company explained in a statement that global inflation had increased the cost of raw materials due to which they were also forced to hike prices.
As the housing prices and CPI continue to rise, it is likely that the Bank of Israel will also increase rates further to prevent overheating in the economy.