The steady rise in housing prices concerns the members of the Bank of Israel Monetary Committee, according to the minutes of the deliberations over the March interest rate published by the Bank of Israelon Monday. The committee members unanimously decided to leave the 0.1% rate the historic low to which the bank's interets ratewas reduced exactly one year ago.
The committee members were presented figures showing an 8% increase in home prices during 2015 in contrast to projectionsby economists that prices would stabilize and even begin to declinein the second half of the year.
The committee was presented with two furtherworrying figures. The first the volume of new mortgages remains high at NIS 4.75 billion in January (considered a relatively weak month).
The second interest rates on new mortgages signed in January rose for all variable-rate mortgages by 0.7% to 0.21%, continuing the trend that started in May.
“The committee expressed concern over the pace of growth in apartment prices,” said the document. “Its members said the public continues to take on new mortgages at an increased pace,and also noted that real interest rates on mortgages have been rising in recent months. They agreed the latent risks in the market remain high.”
Published by Globes [online], Israel business news - www.globes-online.com - on March 8, 2016
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