The volume of new mortgages granted in October totaled NIS 3.5 billion, banking sources estimate. This figure is ostensibly weak, down 17%, compared with the NIS 4.2 billion monthly average over the past 12 months, and lower than the NIS 4.4 billion total in October 2013.
At the same time, the sources emphasize that the figure is actually fairly strong, in view of the fact that there were few working days in October because of the holidays. "The average volume of mortgages was NIS 200 million per day. Four working days were missed in October because of the holidays, and three more days fell on the intermediate holiday days, when the banks worked only half a day. It is therefore certainly possible that had those days been full workdays, the volume of mortgages would have been NIS 4.5 billion, if not more," a senior banking source said.
"In my opinion, taking into account the circumstances of the holidays during the month and the fence-sitting in expectation for the 0% VAT plan, the figures are definitely strong," the source added. He predicted that when the 0% VAT plan takes effect, especially higher figures would be seen in the market.
All in all, 2014 is emerging as a strong year in the mortgage market. Mortgages totaling NIS 42 billion were taken in the first 10 months of 2014. The peak was in July, when mortgage volume totaled almost NIS 5 billion. If the last two months of the year are also strong, last year's record of over NIS 50 million may be broken
Although the 0% VAT plan caused more than a few apartment purchasers to sit on the fence in recent months, the continued downtrend in the interest rate to 0.25% continues to fuel demand on the market. The banks believe that if the interest rate falls to 0%, we will see large-scale movement by investors back into the market. "We are already seeing investors picking up their heads a bit, but very cautiously. At the same time, a cut in the interest rate could certainly bring them back into the market en masse, and bring their proportion up to 30% of the market," a senior banking source stated.
Published by Globes [online], Israel business news - www.globes-online.com - on October 26, 2014
© Copyright of Globes Publisher Itonut (1983) Ltd. 2014