developing· Economy· Updated
Israeli Mortgage Lending Hits Record High Amid Housing Market Slowdown
Israel's mortgage market experienced a significant surge in October, with housing loans reaching 9.284 billion shekels, or 9.3 billion shekels according to Globes. This represents a 7% increase from the previous month, a typical rise following the High Holidays, and brings the year-to-date total to 97.5 billion shekels.
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What happened
- 01Israeli mortgage lending reached 9.284 billion shekels in October, marking a 7% increase from the previous month.
- 02Year-to-date housing loan volume reached 97.5 billion shekels, representing a 14% increase compared to last year.
- 03The surge in mortgage volume comes despite a housing transaction pace that is 40% lower than the 2021 peak.
- 04Borrowers are shifting away from index-linked options, which fell to a historic low of 8% of all loans.
- 05Prime-rate loans increased to 28% of the total market as borrowers anticipate future interest rate cuts.
- 06The average weighted nominal interest rate rose slightly to 4.42% in October, up from 4.35% in September.
- 07The Association of Mortgage Consultants urged caution and advised borrowers to carefully plan their financial repayment capacity.
The year-to-date volume marks a 14% increase compared to the same period last year, nearing the peak levels seen in 2021 and 2022. However, this high volume comes despite a general slowdown in actual apartment sales, with the current transaction pace approximately 40% lower than the 2021 peak. According to the Association of Mortgage Advisors, the strong mortgage activity is driven by the completion of past deals, financing promotions, and mortgage refinancing as borrowers capitalize on falling interest rates.
The data also reveals a shift in consumer behavior, with borrowers increasingly avoiding index-linked tracks, which fell to a historic low of 8% of all loans. Conversely, prime-rate loans grew from 26% to 28% of the total, while the weighted nominal interest rate rose slightly to 4.42% from 4.35% the previous month. The Association of Mortgage Consultants urged caution and advised borrowers to carefully assess their repayment capacity in the current high-lending and high-interest rate environment.
Summarized by baba from the reports of 3 newsrooms. Updated
Latest report: Behadrei Haredim. Read Behadrei Haredim’s originalThe coverage
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