The mortgage market in July: The public took new mortgages in the amount of NIS 11.5 billion

The mortgage market continues to show strong and exceptional results. The data published today (Tuesday) by the Bank of Israel shows that in July 2021, the public took out new mortgages in the amount of NIS 11.5 billion. These figures are identical to their counterparts in June 2021, when new mortgages were taken out for the exact same amount - but close to twice the same period in 2020 (6.53 billion) and 2019 (6.67 billion).
In total, in May-June-July 2021 the public took out new mortgages of NIS 32.6 billion, and from the beginning of the year the public took out new mortgages of NIS 63.2 billion. The amount of mortgages in July 2021 is also 50% higher than the average in the last 12 months.
The current increase is in line with the estimates of senior bankers in the mortgage market, who hold that the market is now stabilizing around the equilibrium point of taking out new mortgages of NIS 12-11 billion a month. If the rate of taking out mortgages continues at this rate, 2021 will end as a record year - in which the public will take out mortgages in the cumulative amount of close to NIS 120 billion. For comparison, the cumulative total mortgage in 2020 was NIS 78 billion - which was a record in itself.
There are many reasons for the current bubble in the mortgage market, which together lead to a 7.2% rise in housing prices (in annual terms) - and one of the main ones is the fact that the new government has not yet released any operative plan outlining how it intends to address sharp housing prices.
The public is not waiting for the government. Investors, young couples, foreign residents, winners of a price-per-tenant project - all turn to buying apartments soon, in the assessment that their price will only increase further, given the large gap between the existing supply of apartments and the rising demand. At the same time, the low interest rate also contributes its share, and also strengthens the peak demand for mortgages.