"The banking system in the field of mortgages is not the system that fuels the housing price market, and it responds to customer demand for mortgages," said the Bank of Israel's Supervisor of Banks, Yair Avidan, at the Israel Today conference on socio-economic resilience.
He said, "Housing prices in Israel are rising due to sub-supply: planning, tenders for land, evacuation-construction, advanced transportation. Restraining housing prices should come through accelerating construction and shortening processes, and certainly not through suppressing demand, certainly for first-time home buyers and housing developers. "Systemically, it is worth noting that banking in Israel is conservative. This emerges in international comparisons and in part as a derivative of regulation, characterized as a world expressed in the debt-to-GDP ratio."
Asked if the prime reform (lowering mortgages by increasing the share of the track in prime interest rates) caused housing prices to rise, Avidan replied: "The timing was not optimal in carrying out the reform, but it is certainly not the main component that leads to the rise in housing prices."
Avidan added that he sees great importance in the role of the banking system in the socio-economic fabric of the country.
"Banks are working, and will work even harder to strengthen their purpose and mission, not to be tested solely on profitability. Profits generated while providing social value, these are profits of strategic value. The strength of the system is measured by its ability to be flexible and creative. To try and help. "
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