Banking sources are predicting that new mortgages in March will total NIS 4.3 billion, 20% less than in March 2016 and 10% less than the monthly average over the past 12 months. The Bank of Israel yesterday reported that mortgages amounted to NIS 4.1 billion in February. February is a short month with fewer workdays than other months, but the figure this year was more than 15% less than in February 2016.
Mortgage market sources said that this pace of mortgages would persist in the coming months until a real change in the market occurs. "There is still uncertainty in the market, and people are naturally inclined to sit on the fence waiting to see which way the wind blows," a senior source in the sector said. "There is no clear trend in housing prices, either. The results and effects of the buyer fixed price plan are also unclear, with no clarity about the tax on a third housing unit either. For now, groups like investors and purchasers of a first home prefer to wait," the source added.
The recent mortgage figures are tepid, but would have been regarded as high as recently as three years ago. Since housing prices have risen steeply since then, the volume of mortgages is lackluster in comparison with the current level of prices. According to yesterday's Bank of Israel figures, the mortgage interest rate resumed its climb, following a halt in January that broke a streak of 18 consecutive monthly rises. The interest rate on fixed-interest shekel mortgages rose from 4.44% in January to NIS 4.46% in February, and the interest rate on fixed-interest index-linked mortgages rose more steeply from 3.85% in January to NIS 3.92% in February, its highest level in the past 12 months.
Published by Globes [online], Israel Business News - www.globes-online.com - on March 28, 2017
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