January 2020: new residential mortgages totaled NIS 6.1 billion - increase of 16.5% compared 2019

The year 2020 is opening up in the mortgage market: According to data published by the Bank of Israel, new residential mortgages in January totaled NIS 6.1 billion. This is an increase of 16.5% compared to January last year (NIS 5.2 billion).
It is also up more than 6% in January compared to each of the past few months (except December, which was an all-time high).
The data shows that the increase in mortgage recycling continues. Last January, the volume of recyclables stood at NIS 465 million, more than double that of January 2019. The figures also show that NIS 723 million was borrowed in January 2020 for investment apartments, and NIS 909 million for apartments sold as part of a cost-per-plan plan.
Despite high demand, the level of mortgage interest rates remained stable. For example, data from the Bank of Israel show that the average interest rate on the shekel track was 3.2% on average in January, similar to last month. However, this is a low interest rate compared to January last year, so the average interest rate was 4.1%.
A month ago, mortgage data was released for December, when the public took a record-breaking NIS 7.2 billion, putting 2019 at an all-time high in mortgage lending. At the same time, the January-December period, which is characterized by high trends in the mortgage market, should not be compared.
However, even in December 2019 compared to December 2018, this is a 20% increase in mortgages taken. According to estimates of a housing price plan that did not result in a fall in housing prices, the public dropped out of the fence and purchased apartments, both from those eligible who sought the benefit granted by the state, and from the non-eligible population segment, and his expectations of a fall in housing prices did not materialize. The absence of a government and even the current provider about the success of third elections may continue to intensify this phenomenon.
mortgageˈmôrgijThe year 2019 recorded the highest annual mortgage volume recorded in Israel, and in December 2019 broke the monthly mortgage record, much thanks to a mortgage price plan that added to the market for young borrowers taking high-volume mortgages - according to the Bank of Israel's review of the December 2019 mortgage market. Mortgages grew by 13.8% last year from 2018 to NIS 67.6 billion (a monthly average of NIS 5.6 billion). Compared to 2015, the previous peak year, a 4.6% increase was recorded. However, while in 2015 a record number of real estate transactions, which reached about 120,000 apartment purchases - 2019 will amount to around 108,000 transactions, and clearly not the amount of transactions is behind the record.

Price to the buyer is the main reason. A large mass of transactions signed under the government plan jumped mortgage performance. As of March last year, the total transactions in a reduced-price dwelling (per-user price plan and a few dwellings sold under the "target price" plan) accounted for 17% of the total transactions, with the total loans in a reduced-price apartment constituting 12% of the total performance (approx. NIS 7 billion) in housing credit.
The big high came last month. In total, 10,215 loans were given to purchase apartments in December. This is the largest number of monthly loans since August 2015. 1,943 of those borrowers came to the banks in order to obtain loans to purchase apartments at a cost to the buyer. This is a monthly record, which was also accompanied by a record of performance by the banks, which lent to those buyers NIS 994 million - which is also a monthly record in terms of performance for the purpose of buying apartments at a cost to the buyer. In total, between March and December 2019, approximately 14,000 loans were awarded to the recipient of the prize. In December 2019, 1,434 mortgages were taken for investment purposes. This is the highest number since December 2014. Are investors returning to buy apartments, despite the high tax burden that Kahlon imposed on them since 2015? It's too early to assess.
The Bank of Israel notes the decline in interest rates on the new housing loans that accompanied the increase in mortgages. This decline encompassed all interest rates and linkage sectors.
However, as we emphasized earlier, the peak in mortgages was directly attributable to the high proportion of loans at high financing rates (75% to 60% of the value of the property), due to the rising share of borrowers in a mortgage project project, which tend to be characterized by higher financing rates than other non-borrowers. Mortgages; And against the background of the Banking Supervision's easing of capital requirements for housing loans at high financing rates (easing the way banks will weigh mortgage assets at a 60% -75% financing rate, March 2018).
And in the case of falling interest rates, the amount of mortgage refinancing is also rising. In 2019, the volume of recyclables was about NIS 9.1 billion, about one-eighth of the total loans granted, compared with NIS 5.8 billion in 2018 (about 9% of total performance in the same year).