Mortgages soared 23% to NIS 5.8 billion in May, according to figures published today by the Bank of Israel. May was one of the strongest months for mortgages in Israel's history. The increase follows strong mortgage performances of over NIS 5.5 billion in March and December 2014. Mortgages totaled NIS 60 billion in the 12 months ending in May.
The May mortgage figures were expected to be high, following a report in "Globes" that Minister of Finance Moshe Kahlon was planning to raise the purchase tax on apartments purchased as investments. This plan led many investors to plow into the real estate market and bring forward their housing purchases before the tax is raised. Yesterday, when Kahlon published his complete real estate plan, it was learned that the purchase tax on apartments for investment would be raised to 8-10%.
The trend towards mortgages with fixed interest rates continued last month as a result of the negligible prevailing interest rate. Mortgages taken at fixed interest jumped 28% to NIS 3.2 billion, while mortgages with variable interest totaled NIS 2.5 billion, up 19%, compared with April. Actually, fixed interest rate mortgages have outstripped variable interest rate mortgages since the beginning of the year.
Published by Globes [online], Israel business news - www.globes-online.com - on June 11, 2015
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