Mizrahi Tefahot CEO Sees Mortgage Market Hitting Up to NIS 120 Billion in 2026
Mizrahi Tefahot Bank CEO Moshe Larry told the bank’s annual real estate conference, held with Yedioth Ahronoth Group, that Israel’s economy is operating unusually well despite the security emergency and “non-normal” conditions. He said the real estate sector, though facing clear challenges, is still functioning “in an optimal way,” and argued that property contributes to the national economy about as much as the high-tech sector.
Larry said demand has softened, especially in the new-home market, while supply indicators such as construction starts and land marketing have remained stable or even risen. As a result, he said Israel now has a record 86,000 unsold apartments, roughly double the 40,000 recorded three years ago. He also pointed to a new obstacle over the past year, a stronger shekel, which he said makes homes effectively more expensive for foreign buyers, new immigrants, overseas residents, and others purchasing in foreign currency, by tens of percent and hundreds of thousands of dollars.
On the industry’s outlook, Larry rejected repeated predictions of a collapse, saying that despite years of “apocalyptic forecasts,” he believes developers, contractors, and lenders are acting responsibly. He said Mizrahi Tefahot has tracked about NIS 1 billion in contractor loans over the past three years, with virtually no cancellations. About 70% of borrowers completed the deal, received the apartment, and refinanced the mortgage over a longer term, while 30% repaid the loan and finished the purchase without continuing the mortgage.
Larry said the mortgage market is thriving. After 2025 ended with NIS 106 billion in mortgage volume across the system, he expects 2026 to close at NIS 110 billion to NIS 120 billion. He said the apparent gap between softer demand and rising mortgage volume reflects the market’s complexity, and added that if the security situation stabilizes and inflation and interest rates ease, demand and activity in the sector should grow further.
