The average mortgage volume in Israel as of April is NIS 991.7 thousand, according to data from the Bank of Israel published today (Thursday). This is an increase of 2% compared to the previous month, when the average mortgage volume was NIS 970,000, and 14.5% compared to the corresponding period last year.
In the offsetting of the credit given as part of an apartment at a reduced price, the average mortgage is NIS 1.01 million. The volume of mortgages taken as part of an apartment at a reduced price is NIS 959 million, which is 9.1% of the total performance in April, which amounted to NIS 10.48 billion.
The total debt of the public to banks for mortgages continues to rise and stands at NIS 491.34 billion, an increase of about 18% within a year.
Since last December, when there was an increase in the tax on investment apartments, there has been a decrease in the volume of mortgages taken out in favor of investment apartments. In April, the volume of investments taken in favor of investment apartments amounted to NIS 1.025 billion, which constitutes about 9.8% of all loans taken out. This is the lowest rate since April 2011. In December, this figure was 14.6%.
The data also show that the volume of financed loans (LTV) over 60% of the value of the property is constantly rising and as of April stands at 45.4% of the total mortgages taken during the month. For comparison, a year ago this figure was 44%, two years ago it was 40% and three years ago it was 35.8%. The data also clearly reflects the rise in apartment prices after the volume of mortgages taken on apartments valued at NIS 1.2 million to NIS 2 million, accounted for 33% of all mortgages taken in April, compared with 39% in the corresponding period last year.
On the other hand, the volume of mortgages taken out for apartments valued at NIS 2-3 million is 29% of all mortgages taken out in April, compared with 25% last year. The volume of mortgages for apartments valued at NIS 3-5 million is 18% of the total mortgage volume compared to 15% in the corresponding period last year and in apartments valued at over NIS 5 million the mortgage volume is 8% of all mortgages taken compared to 5% in the corresponding period last year.
Not only are apartment prices rising which is forcing buyers to take out higher loans, they are also burdening themselves more by taking out more and more mortgages at a higher rate of their income. According to the data, the rate of loans taken out with a repayment of 30% -40% of income was 40.3% of all loans in April, when a year ago this figure was 34.1%. Moreover, the rate of loans taken with a repayment of 20% -30% of income was 38% of all loans in April when a year ago this figure was 40.4%. A similar trend can also be seen in loans by repayment of 10% -20% of income after the month the volume of loans taken out by this repayment stood at 13.8% of all loans compared to 15.8% about a year ago.
The total debt of the public to banks for mortgages continues to rise and stands at NIS 491.34 billion, an increase of about 18% within a year. According to the data, 65% of all balances in February, similar to January, are in the CPI-linked route, 34% of the balances are in CPI-linked loans, and 1% in foreign currency. The vast majority of loans in the two main tracks are at variable interest rates. About NIS 106 billion in the CPI-linked track are at variable interest rates, and about NIS 195.7 billion in the non-index-linked track are at variable interest rates. This has a significant effect on the Bank of Israel’s decision to raise the interest rate against the background of rising inflation, since raising the interest rate could put a strain on the monthly mortgage repayments.