Mortgage record: in 2021 homebuyers received NIS 116 billion from banks - an increase of 149%

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by Ifi Reporter Category:Real Estate Jan 11, 2022

The year 2021 culminated in a record mortgage market: Homebuyers received NIS 116 billion from banks, a sum that skyrocketed demand and apartment prices to unprecedented highs.
This is an increase of 149% compared to 2020, which was also a record year in real estate, in which the banks marketed NIS 78.1 billion in mortgages. And a jump of 11% compared to the previous month, November 2021. The total number of new mortgages granted by banks in Israel in November is NIS 10.98 billion, an increase of 2.5% compared to NIS 10.7 billion in October.

 The demand for mortgages reflects the activity in the housing industry, the increase in housing prices by an average of 10%, along with the increasing demand for larger apartments. Demand has also increased following the Bank of Israel's decision to increase the credit ceiling in the prime component, a move that has reduced mortgages and allowed homebuyers to increase the mortgage amount.
Another factor that influenced is the increase in investor activity in the housing industry, following the reduction of the purchase tax on apartments for investors in July 2020. The tax rose again in November but according to mortgage data a provider with the tax increase achieved its goal, cooling housing demand. Homebuyers have also increased their mortgage amounts by extending the repayment period to 24 months, compared to an average of 23 months last year.
The banking industry expects the strong demand for mortgages to continue in the coming year, even if the government succeeds in moderating housing prices. The supply of apartments is expected to increase according to plans, and with the increase in supply, an increase in the number of transactions is expected.

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