Despite Covid, Israelis took record mortgages in 2020

Despite the Covid-19 pandemic, Israelis took a record NIS 78.1 billion worth of mortgages in 2020, the Bank of Israel reports, up 15% from 2019. NIS 8.1 billion worth of mortgages were taken in December, making it the second highest month in 2020 after March, even though many people postponed taking mortgages until January when the Bank of Israel eased restrictions on the flexible interest component of mortgages.

The closing months of 2020 were marked by the return of investors to Israel's real estate market after the government cut purchase tax on owning more than one apartment. Investors took relatively high mortgages in comparison to the price of the property they were purchasing in order to take advantage of low interest rates.

15% of mortgages taken in 2020 were for young buyers purchasing homes included in the government's price target buyers plan (Mechir Lemishtaken). The average mortgage of these young buyers in December 2020 was NIS 738,000, up from NIS 511,000 in December 2019.

Published by Globes, Israel business news - en.globes.co.il - on January 26, 2021