Israelis took mortgages totaling NIS 6.8 billion in March 2023, up 18% from February 2023 but down 50% from March 2022, and down 21% from March 2021, the Bank of Israel reports.
The housing market seems to be at the start of a deep depression, which is reflected in a decrease of about 40% in the number of monthly deals completed in the market. The Israel Tax Authority announced this week that state revenues from real estate taxes also fell by 43% in the first quarter of 2023 compared with the corresponding period of 2022. Mortgage taking has decreased accordingly, and for the first time since 2020, three consecutive months have passed in which monthly mortgage taking did not cross the NIS 7 billion threshold.
Israel’s slips into fiscal deficit
All this happening due to the interest rate hikes in the past year, which have made mortgages very expensive and limited borrowers’ ability to take them. The figure published by the Bank of Israel today is not segmented according to the number of borrowers, but from the data of the last few months it appears that the number of mortgages taken out in the last few months is at the level of the second quarter of 2020, when the public came out of the first Covid lockdown. The average mortgage taken on the free market has reached about NIS 950,000 in recent months.
It is believed that despite the increase recorded in March compared with February, the market is currently shrinking. The mortgage taking figure for April is expected to be especially low due to the Passover holiday, and the situation is unlikely to improve in the coming months.
Published by Globes, Israel business news – en.globes.co.il – on April 18, 2023.
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