Israeli Mortgage Market Hits High in October Amidst Slowing Property Sales
Translated & summarized from Globes by baba
Israel's mortgage market reached NIS 9.3 billion in October, a high for housing loans, despite a 40% drop in transaction pace compared to 2021. The total mortgage volume for the year is NIS 97.5 billion, up 14% from last year. Borrowers are increasingly opting for 'prime' loan tracks, while indexed loans are at a low. The strong mortgage market is attributed to past deals and financing offers, not current property sales.
The story in 5 lines · by baba
- NIS 9.3 billion in housing mortgages were issued in Israel in October.
- Total mortgage volume for 2023 reached NIS 97.5 billion, a 14% annual increase.
- Housing transaction pace is 40% lower than the 2021 peak.
- Borrowers are shifting towards 'prime' loan tracks, reducing indexed loan usage.
- The strong mortgage market is linked to past deals and financing offers.
Israel's mortgage market saw a significant surge in October, with NIS 9.3 billion in housing loans taken out, according to a report released by the Bank of Israel. This figure represents the highest level of mortgages issued in the past month.
From the beginning of the year, the total value of mortgages stands at NIS 97.5 billion, a 14% increase compared to the same period last year. This volume is comparable to the peak year for residential real estate in 2021. However, the current pace of transactions is approximately 40% lower than in 2021, indicating a divergence between mortgage activity and the physical housing market.
The Association of Mortgage Advisors noted shifts in borrower behavior and loan composition. The 'prime' track's share increased from 26% to 28%, while the non-indexed variable track decreased. Indexed tracks accounted for only 8% of loans, a historically low figure. The weighted nominal interest rate rose to 4.42%, up from 4.35% in the previous month.
Bridging loans saw a slight increase in their share of total housing credit, rising from 12.8% to 13.0%. Loans for any purpose remained stable at 4.9%. The Association highlighted that the strong performance of the mortgage market appears disconnected from the low volume of physical property transactions, suggesting that current high financing levels are primarily driven by the finalization of past deals and attractive financing offers.
