Mortgages for real estate in Israel trending up but not back to peak
The Bank of Israel released figures showing that homebuyers took out NIS 4 Billion in new Mortgages in February of this year. That figure is 0.5% higher than in January.
Although new mortgages are now trending up, they have have fallen 16% from their peak of NIS 4.8 billion in June 2010. Part of the reason is the interest rate hikes by the Bank of Israel, as well as the new restrictions it placed on mortgages beginning in July of last year. In July 2010, Banks began requiring 40% down payments on new mortgages, which definitely had a dampening effect on the number of mortgages taken out.
The Bank of Israel says that 7,254 mortgages were taken out in February of this year, 0.5% more than in January and 15% more than in February 2010, but 165 fewer mortgages than in the peak month of June 2010.
While the number of mortgages taken out has declined since June of last year, the actual size of the mortgages has increased due to the rising home prices, which began their climb in May of 2007. Home prices have risen 16% in the past year alone and 60% since May of 2007.
Source: Globes online
March 29, 2011
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