2017, a tepid year in the mortgages market, is ending with a bang. Bank of Israel figures show that new mortgages taken in December 2017 totaled nearly NIS 5.1 billion, compared with earlier assessments that the total in December would be NIS 4.5 billion. December is ordinarily a strong month for mortgages, but the figures for December 2017 were also 8% more than the NIS 4.7 billion total for December 2016.
Despite its strong finish, 2017 is shaping up as a mediocre year for mortgages, with a drop in the number of deals. New mortgages totaled NIS 53.4 billion in 2017, 9% less than in 2016.
The downtrend in mortgage interest rates also continued in December. For example, for the first time this year, the fixed shekel interest rate averaged 3.97% in December, the first time in 2017 that it went below 4%. The drop in mortgage interest rates is being attributed to a fall in demand for mortgages and to the banks increasing their exposure to mortgages following the rise in mortgage interest rates two years previously.
Despite the fall in the interest rates, they have not reached the level of two years ago. Banking sector sources assert that the increase in interest rates was a correction by the market, which was not properly pricing the risks. These sources believe that interest rates will remain stable, with the similar rates prevailing in 2018.
Published by Globes [online], Israel Business News - www.globes-online.com - on January 25, 2018
© Copyright of Globes Publisher Itonut (1983) Ltd. 2018