Mortgage lending falls back – Globes

The total number of new home loans in Israel fell sharply in April. Mortgages totaled NIS 10.5 billion last month, 22% less than in the peak month of March, according to Bank of Israel figures released today. The assessment is that the decline is due to home buyers rushing to take out mortgages in March to beat the rate hike announced by the Bank of Israel last month.

April was one of the weakest months for mortgage lending since June 2021. Only during the Jewish holiday season, which fell in September last year, was mortgage borrowing lower than in April. Nevertheless, the total for April was unusually high given that the Easter holidays fell in that month.

The Bank of Israel does not provide a breakdown of mortgage lenders, but figures from the chief economist at the Ministry of Finance indicate that investment buyers have greatly reduced their presence in the market and that investment purchases are back at the level they were at. between June 2015 and July 2020, when the purchase tax for investors was at the level introduced by the then Minister of Finance Moshe Kahlon. Kahlon’s successor, Israel Katz, subsequently lowered the tax rate and investors returned to the market, but in November last year, the current minister, Avigdor Liberman, raised the rate of investment purchases again.

According to the chief economist, the most active buyers in recent months have been young couples, who screwed up their purchases, probably in anticipation of a rise in interest rates. Even after the interest rate rise, they presumably remained very active, leading to a relatively high total for mortgages in April.

Published by Globes, Israel business news – en.globes.co.il – on May 15, 2022.

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