Sunset in Gush Dan/Reuven Castro
The interest rate effect: The volume of mortgages taken out by apartment buyers in 2023 amounted to NIS 71.3 billion.
This number represents a decrease of approximately 40% compared to the volume of new mortgages taken out in 2022, which amounted to NIS 11.6 billion.
The volume of mortgages granted in 2023 is the lowest since 2019, when the new mortgages amounted to NIS 67.7 billion.
This is according to data published today (Tuesday) by the Bank of Israel.
On a monthly basis, the amount of mortgages distributed by the banks in December was estimated at 5.6 billion shekels, the highest in the fourth quarter of 2023, and 1.1 billion shekels higher than the low point in taking out mortgages recorded in October, against the background of the start of the war in the south.
The volume of mortgages in December was the highest since August when new mortgages totaled NIS 7 billion.
Does this indicate the return of the buyers to the market, in the background of the war?
The high interest rate also drove away investors
Let's recall that the Bank of Israel interest rate stood at a zero level for a long period until April 2022, when it began to climb to a level of 3.75% in January 2023 and to 4.75% in December of the same year.
Today the interest rate is 4.5%.
The data in the report show that the high interest rate in the economy also drove away the buyers of investment apartments from the industry.
According to Bank of Israel data, the new mortgage given to apartment buyers in 2023 amounted to NIS 7.1 billion, a 45% plunge compared to the mortgages taken out by investors in 2022, which amounted to NIS 12.9 billion.
The volume of mortgages in 2023 is 53% lower compared to the new mortgages taken out in 2021 by investors, which amounted to NIS 15.05 billion.
Another interesting statistic published by the Bank of Israel indicates that of the mix of mortgages taken out in December, the part given at a fixed interest rate and not linked to the index is estimated at 30%, the highest rate since September and the second highest since May 2022. So it can be said that the new mortgage takers are not building on a sharp decline at interest, at least not in the near future.
More on the same topic:
real estate