Luxury Mortgage Lending Hits Record Highs Amid Surge in Foreign Buyer Activity

In June, mortgage balances held by foreign residents in Israel surged by 104 million shekels compared to May, marking the largest monthly increase since at least 2010. This rise brought the total foreign resident mortgage balance to 686 million shekels, up from 582 million shekels the previous month. Although these amounts represent only about 0.1% of all mortgage balances, the nearly 20% monthly growth is notable.

Simultaneously, mortgages for luxury apartments in Israel reached unprecedented levels. Buyers of properties priced at 5 million shekels or more took out approximately 1.8 billion shekels in mortgages, setting an all-time record. Those purchasing homes in the 3 to 5 million shekel range secured 3.1 billion shekels in mortgages, the second-highest amount ever recorded. Together, these two luxury segments accounted for 44% of all mortgages issued in June, another record.

The overall mortgage volume for the month reached 11.1 billion shekels. The average mortgage for non-investor buyers in the free market was about 1.1 million shekels, consistent with previous months. Investors continued to take out significantly larger loans, averaging 1.37 million shekels per property. Meanwhile, buyers of subsidized apartments under the "Price for Target" program took out average mortgages of 748,000 shekels.

These figures suggest a growing demand for high-end real estate in Israel, possibly driven by both domestic luxury buyers and foreign investors acquiring mega-luxury properties. The data was released by the Bank of Israel and highlights shifting trends in the mortgage market, with luxury housing and foreign purchases playing an increasingly prominent role.