The public took mortgages totaling NIS 50.5 billion in the first nine months of 2019, an all-time high, breaking the recording set in the first nine months of 2015, the Bank of Israel reports. This is a direct result of the Buyer Fixed Price Plan, which was responsible for mortgages totaling NIS 4.7 billion in the past seven months. The proportion of mortgages taken for apartments purchased under the plan averaged 12% a month.
Mortgages totaled NIS 5.7 billion in September, NIS 300 million less than in August, but the highest figure for September in the past 10 years. September is usually a relatively inactive month in the mortgage market because of the Jewish holidays late in the month, but the figure this September was still high by any criterion in comparison with other months.
Some of the reasons for the new record involve the uncertainty that began late last year when Prime Minister Benjamin Netanyahu announced the dissolution of the cabinet and new elections. A new government has yet to be formed. The real interest rate at the time was 1.9%, but has fallen to 1.3% in recent months. These two factors led the public to buy more housing units.
As a result, the volume of mortgages has been growing, following a slowdown that lasted from late 2016 until late 2018. The monthly mortgage totals during this period did not exceed NIS 5 billion, but have never been below this figure since then.
Published by Globes, Israel business news - en.globes.co.il - on October 29, 2019
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