A new record for mortgage taking in Israel in March has been set, beating the previous record of NIS 12.2 billion in December 2021. Mizrahi Tefahot Bank (TASE:MZTF) EVP corporate banking Ofir Morad told the "Globes" Real Estate and Infrastructures Conference earlier this week, "We at Mizrahi Tefahot control over 30% of the mortgage market and we expect that March will be a record month, with more than NIS 13 billion in mortgages."
Israel's other major banks confirm Morad's forecast of more than NIS 13 billion in mortgages taken this month. With housing prices having risen 13% over the past year, it would seem that the market remains at boiling point, although it remains unclear how much expected rate hikes will cool the market.
At the conference Morad stressed that the continued record level in mortgage taking stemmed from the current low interest rate. "Even if the interest rate does not rise over the next month, it will rise in two months," warned Morad. "This rise will have an influence on demand from the public for apartments and the ability of households to buy apartments. We cannot have any illusions. Interest rates will rise as they have done in the US and in Europe."
The consensus in Israel's banking sector is that the public has taken on board that interest rate hikes are imminent, even before the Bank of Israel makes the decision, and are trying to bring forward mortgage payments. The ongoing rise in the building inputs index provides another incentive for paying contractors sooner rather than later.
Published by Globes, Israel business news - en.globes.co.il - on March 31, 2022.
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