The Bank of Israel data once again show the continued contraction of the real estate market – the volume of mortgages is decreasing, in fact it is a fall of more than 60% in the volume of mortgages in the last year. So it is true that a year ago it was almost the record, but it is still an extremely rapid free fall, which is the reason The only one is the Bank of Israel’s rapid increase in interest rates – financing is becoming more expensive and the public cannot afford to run wild with mortgages like a year ago.
The Bank of Israel interest rate increased this week by another 0.5% and is already at 4.25% (compared to 0.1% a year ago) and the prime rate is already at 5.75%. These are completely reasonable levels from a historical point of view (in Israel there were also periods of 10% and more), but to the public who got used to zero interest rates for more than 10 years, these interest rates suddenly seem very high. What has changed is that there is a price for money, so the demand is decreasing. This is the normal reality and assuming that inflation does not return to zero again for an entire decade, there will probably also be a higher interest rate environment here than what we have become accustomed to since 2008.
At the same time, the average mortgage amount drops from one million shekels to 940 thousand shekels per month. It may mean that the public who are still ready to buy an apartment are looking for cheaper apartments. Assuming this is the case – you will continue to see the contractors’ promotions and the people who want to sell an apartment lowering prices. There are always people who need to sell, so if they don’t find buyers they will have to compromise on the price. Prices are already falling by 5-6% and the question is of course how long the declines will last.
How much people exaggerated with the mortgages they took can be evidenced by Bank of Israel data: 43% of the mortgages were taken with a leverage level higher than 60% of the apartment’s value (LTV). That is, if the average price for an apartment is NIS 2 million, this means that those people took out a mortgage of at least NIS 1.2 million. At the same time: in almost half of the mortgages taken out in January (48%), the monthly repayment of the mortgage is higher than 30% of the entire income of the household (the rate of monthly repayment from the income) – this indicates a high risk of those who take a mortgage. If there are suddenly layoffs in the economy, or if their income is reduced for some other reason – it will be very difficult for them to meet the repayments
And we’ll just remind you of the guide – does the bank offer you to spread the mortgage? Not sure it’s in your best interest. The interest rate in the economy rises and suddenly you start receiving phone calls from the bank with magic offers: to lower the monthly repayment. But just before you do that, remember: the bank is not your friend. He will earn from this another 35-60 thousand shekels – at your expense (for more information)
In the meantime, here are real estate transactions from the past week:
Mevaseret Zion
6-room semi-detached house + 3-room yielding unit on Shabi Zion Street in Mevsaret Zion, 232 square meters, 3 square meters balcony + 5 square meters balcony, huge garden about 240 square meters, with private parking, sold in 5.5 million shekels
Rishon Lezion
On Pinsker Street, a 3-room apartment, about 75 square meters on the fourth floor, was sold for NIS 1.480 million.
streets
On Traves Street, a 4.5-room apartment, 133 square meters + 11 square meters of sun terrace and parking on the fifth floor was sold for NIS 2.315 million.
A 3-room apartment, about 65 square meters on the third floor, was sold for NIS 1.390 million on the Etrog Alley Street.
Beer Sheva
4-room apartment, Jericho Street, neighborhood 9, 110 square meters, floor 8 out of 8, parking, elevator, sold for NIS 1,000,000
3.5 room apartment, Shaul Hamelech Street, neighborhood 11, 87 square meters, 4th floor out of 4, sold for NIS 610,000
2-room apartment, Hana Senesh Street, neighborhood C, 45 square meters, 2nd floor out of 3, sold for NIS 640,000
4-room apartment, Bnei Or Street, neighborhood B, 78 square meters, 3rd floor out of 3, sold for NIS 840,000
3-room apartment, Hida St., neighborhood 11, 70 square meters, 3rd floor out of 4, sold for NIS 665,000
3-room apartment, Leib Yaffe Street, neighborhood 3, 76 square meters, 3rd floor out of 3, sold for NIS 720,000
4-room apartment, David Wolfson Street, neighborhood C, 91 square meters, 2nd floor out of 3, sold for NIS 815,000
Haifa
3-room apartment, Meir Rothberg Street, the German Colony neighborhood, 100 square meters, 30 square meters balcony, ground floor out of 3, sold for NIS 1,400,000
4-room apartment, Leon Blum Street, Hadar Alyon neighborhood, 100 square meters, 4th floor out of 4, sold for NIS 1,250,000
2-room apartment, Leon Blum Street, Hadar Alyon neighborhood, 50 square meters, floor 7 out of 8, parking, elevator, sold for NIS 800,000
Kiryat Motzkin
4-room apartment, Kadish Luz Street, 80 square meters, 16 square meters balcony, 2nd floor out of 6, parking, elevator, sold for NIS 1,340,000
2.5 room apartment, Darech Acre Street, 50 square meters, 2nd floor out of 2, sold for NIS 830,000
3-room apartment, Kadish Luz Street, 76 square meters, 2nd floor out of 4, sold for NIS 910,000
Holon
2-room apartment, Krause Street, 58 square meters, 4th floor out of 4, elevator, sold for NIS 1,680,000
Bat Yam
3-room apartment, Livorno Street, 84 square meters, floor 8 out of 9, elevator, sold for NIS 1,775,000
Rosh HaAyin
4-room apartment, Ben Gurion Street, 119 square meters, floor 5 out of 7, parking, elevator, sold for NIS 2,670,000
4.5 room apartment, Ofra Haza street, 112 square meters, floor 6 out of 20, parking, elevator, sold for NIS 2,730,000
earing
4-room apartment, Oren Street, 103 square meters, balcony 12 square meters, floor 6 out of 8, parking, elevator, sold for NIS 1,630,000
4-room apartment, Sapir Street, 96 square meters, 12 square meters balcony, 2nd floor out of 5, parking, elevator, sold for NIS 1,500,000,
Jerusalem
3.5 room apartment on Dov Sadan Street in Pisgat Ze’ev, 85 square meters including balcony, 2nd floor out of 3, rented for NIS 4,100 per month
Tzur Hadassah
4-room apartment on Racsim Street in Zur Hadassah, 100 square meters, 2nd floor out of 3, 10 square meters balcony, with parking, rented for NIS 5,300 per month
The data was collected from Remax, Anglo Saxon, Dyor Plus and the Tax Authority data.