BoI warns bank CEOs on rising real estate credit risks

Yair Avidan / Photo: Rami Zarniger , PR

The Bank of Israel's concern follows the rise in mortgage taking with high rates of leverage of 60% - 75% of the property.

The Bank of Israel has summoned the CEOs of the country's major banks to a video conference call on the rise in risk of the bank's real estate credit portfolios, sources close to the matter have told "Globes." The Bank of Israel's concern follows the rise in mortgage taking with high rates of leverage of 60% - 75% of the property.

The data about the rise in risk in the real estate credit portfolios of banks was contained in the Bank of Israel's survey of the banking system for the first half of 2021, which was published last week. The meeting with the bank CEOs today, in which Bank of Israel Governor Prof. Amir Yaron and Supervisor of Banks Yair Avidan will participate, will further stress the risks.

Israel's real estate market has been booming over the past year with a major rise in the number of deals, rising prices and the purchase of more expensive homes with higher financing. In August alone NIS 11.9 billion worth of mortgages was taken while the Madlan real estate sales and rental site found that over the past year prices of apartments in new projects in the Bavli neighborhood of Tel Aviv have risen 26% and in Tel Aviv city center by 25%.

These price rises have seen the average mortgage taken in 2021 rise to NIS 881,000, up 13% from 2020.

Published by Globes, Israel business news - en.globes.co.il - on November 14, 2021.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2021.

Yair Avidan / Photo: Rami Zarniger , PR
Yair Avidan / Photo: Rami Zarniger , PR
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