NIS 5.5 billion worth of mortgages were taken in January 2024, the Bank of Israel reports, down 13% from January 2023 and down 45% from January 2022.
Many in Israel's real estate market claim that the sector has been demonstrating recovery since November 2023, and it is true that data has been stronger than the low-point of October 2023 and the start of the war but the latest figures are not higher than September 2023, traditionally seen as a weak month because of the holidays.
Also the claim that the rate cut at the beginning of last month would bring a rise in demand is not backed up by the Bank of Israel's figures. The level of mortgages taking characterizes about 5,000 deals in January, which is considered a low monthly number.
In recent months, two contradictory phenomena have been evident. On the one hand, there has been an increase in the number of arrears in mortgage repayments by apartment buyers who find it difficult to meet the repayments due to the high interest rates, while on the other hand, a record has been broken in the average mortgage amount taken by government subsidized apartment buyers, and a significant increase was recorded in the average mortgage amount taken by the general public.
It can be estimated that this situation reflects financial problems that apartment buyers have encountered in recent years, including reservists and people whose businesses and jobs have been hit by the war. It also reflects the mindset among the apartment buyers, who see that apartment prices have not fallen by much and will rise again in the future.
Published by Globes, Israel business news - en.globes.co.il - on February 13, 2024.
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