The mortgage market continues to bubble, and despite the increase in interest rates during June, mortgages were taken to the extent of NIS 11.9 billion, according to Bank of Israel data published yesterday. This is an increase of 2.5% compared to June 2021 and a moderate decrease of 0.8% compared to May last year.
A mortgage record of NIS 13.4 billion was taken last March. During the second quarter the interest rate was raised several times and reached 1.25%. The latest interest rate increase of 0.5% increased her monthly mortgage repayments by NIS 300-400.
The bulk of the blow was recorded in mortgages attached to the prime rate, which automatically become more expensive with the interest rate. The move was led by the Governor Prof. Amir Yaron. According to analysts, Yaron will raise the interest rate by 0.5% in the upcoming decision that will be received on August 23.
Despite this, the increase in interest rates is not evident in the decrease in the volume of loans, even though housing investors have reduced their share in buying apartments – which is 11% of the volume of transactions. Housing prices according to the recently published index have risen by more than 16% in the past year.
The following numbers will testify to the significance of the hot market: the average mortgage loan currently stands at NIS 988,000. In the first half of 2022, loans were taken in the amount of NIS 69 billion, in the last 12 months in the amount of NIS 145 billion, and in 2020 in the amount of NIS 78 billion.
According to the data, it turns out that public debt from the borrowers to the banking system crossed half a trillion shekels for the first time, and it amounts to 505 billion shekels. The public of mortgage recipients numbered about one million families.
Another figure published yesterday is that the extent of leverage (the amount of the mortgage relative to the transaction amount) continues to rise. The leverage among 46% of the mortgage recipients was 60-70% in the last month. The construction and housing companies will publish their financial statements for the half of 2022 in the coming weeks.
The data shows that companies such as Azorim, Africa Residences, Shikun and Binui Real Estate, Ashstrom, Dimari, Parshkovsky, Boni Al-Thaiyan and Mor increased the sale of the new apartments, and the public financed the purchase through an increase in credit volumes from the banks.
The Chairman of the Institute for Structural Reforms, Adv. Shraga Biran, said yesterday with the publication of the Bank of Israel data that there are still hundreds of thousands of households who cannot afford to buy an apartment even before the interest rate increase, but “no one is counting them, and there is no real plan to solve the housing problem” .