The large decrease in mortgages continues, and is even gaining momentum:
from Bank of Israel data published today (Mon) that the volume of new mortgages taken out in February was only NIS 5.73 billion - a figure that reflects a 49% decrease in the volume of mortgages taken out compared to February last year, and a 10% decrease compared to the month of January 2023 that preceded it.
If that's not enough, this is about a 3-year low in the volume of new mortgages, since the first corona shutdown that paralyzed the economy in April 2020, and even reaching the average level of mortgages taken out 4 years ago - and considering the fact that apartment prices have jumped by more than 35% since then, the volume of mortgages which stands at NIS 5.74 billion, indicates a greater drop in the amount of apartments purchased last February.
Among the leading reasons that can be pointed to for the great collapse in the scope of taking out mortgages are the succession of interest rate increases that significantly increases the cost of the loan and also the monthly repayment by about NIS 700 for an average mortgage, as well as the legal reform that creates a sense of uncertainty about Israel's economy.
Demand drops: within a year - a collapse of 49% in the volume of mortgages taken out (Photo: ShutterStock)
In the previous months we reported a consistent decrease in the level of mortgages taken out.
Between November 2022 and January 2023, there was a 30-40% decrease in the volume of mortgages taken, compared to the corresponding months in previous years (in October the decrease was 43% due to the Tishrei holidays).
The current decrease is much higher, and therefore it seems that not only the interest rate increase procedure explains the figure and that the general atmosphere in the country apparently affects the real estate market as well. As of today, the Bank of
Israel has not published the segmentation of these mortgages according to the division into sectors, i.e. investors, buyers at the price for residents and buyers of single apartments in the free market, which is expected to give another interesting aspect.
We will remind you that on 3.4 the next interest rate decision by the Governor of the Bank of Israel will take place, in which, according to the expectation, the Bank of Israel may raise the interest rate for the ninth time in a row, and perhaps cool down by a few degrees the The mortgage market, which is no longer so hot.
Real estate
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real estate
mortgage