Israel Bank: The volume of mortgages taken out by home buyers in October dropped by 21%

The volume of mortgages taken out by home buyers in October dropped by 21% compared to September - according to data published today (Sunday) by the Bank of Israel. The banks marketed mortgages amounting to only NIS 6.089 billion, compared to NIS 7.7 billion in September. Compared to October 2021, this is a decrease of 43%.
The decrease reflects the drop in activity in the housing market, the main cause of which is the rise in interest rates on mortgages. However, the October figures were affected by the Tishrei holidays, which greatly reduced business activity in the first half of the month. Despite the decline in activity volumes, the banks are expected to summarize 2022 as a record year in mortgage marketing, in which the 102 billion shekels mark was crossed for the first time. The record was achieved thanks to the large influx of apartment buyers in the first half of the year.
In the summary of the first ten months of the year, the banks marketed mortgages to the public amounting to NIS 102.5 billion, which is a 10% increase compared to the first 10 months of 2021.
Despite the decrease in the volume of apartment purchases and the first signs of discounts given by the contractors to the apartment buyers, no data indicating a drop in prices has been published so far. This week, the Central Bureau of Statistics and the Ministry of Finance are expected to publish additional data on the scope of new apartment purchases, probably also during the third quarter of the year, and on Tuesday, the Central Bureau of Statistics is expected to publish data on changes in apartment prices. The economic ministries expect that the data will reflect a slowdown in the rate of price increases, as a result of the increase in the supply of apartments and the increase in interest on mortgages.