Israeli Mortgage Lending Hits Record 11.56 Billion Shekels in July Amid Market Shifts

The Bank of Israel released its monthly mortgage report revealing a record high of 11.56 billion shekels in mortgage loans taken in July. Since the beginning of 2023, the cumulative mortgage volume reached 68.7 billion shekels, marking a 13% increase compared to the same period last year and projecting an annual pace of approximately 118 billion shekels, a historic peak.

The report highlights a significant shift in loan composition, with a notable decline in index-linked loans to about 9%, while prime-linked loans rose to 22%, and non-indexed variable loans continued to strengthen. Meanwhile, mortgages for all purposes dropped by 4.7%, and bridging loans decreased by 13.9%, with long-term housing credit accounting for 82% of total lending.

The Association of Mortgage Advisors cautioned that the record figures mainly reflect past commitments, particularly developer transactions with deferred payments signed in 2023 and 2024, now reaching the stage of actual mortgage uptake. They stressed that these numbers do not indicate a new surge in housing demand. The association warned against complacency, emphasizing the ongoing housing crisis's severe impact on the public and urging government leaders to address the housing market challenges urgently, even before upcoming elections, likening the housing crisis to a critical economic threat to young couples' futures in Israel.