The war and the high interest rate environment have left their mark not only on existing mortgage loans, but also on demand for new mortgages. Mortgage loans in October amounted to a very low NIS 4.55 billion. This is even lower than the total for April 2020, when there were just 2,100 transactions, because of the Covid lockdown, and the Passover holiday, which fell in that month. Mortgage loans totaled NIS 4.97 billion in that period.
The reason for the October slump is first and foremost the war in the Gaza Strip, but also the Jewish holiday season, which stretched into the first week of the month. In boom times, the weeks after the Jewish holidays are characterized by high levels of home loans, because transactions have been deferred in the holiday period, but the war that broke out on October 7 completely eliminated that effect, partly because sellers, buyers, lawyers and bankers were drafted into the IDF reserves, and bank branches, especially in the south, were shut.
The weakness in the mortgage market continued into the first half of November, but the figures for the second half of the month look better. The banks estimate that total activity will be higher than October, and that loans will amount to between NIS 5 billion and NIS 5.5 billion in both November and December. This is all on the assumption that the war does not escalate and spread to other fronts.
These figures are of course well below the peaks of 2022, and even below the figure for September this year (NIS 7 billion), but they do represent a degree of recovery, including in demand for new mortgages, and not just recycling of loans, which accounted for about a third of demand in the past few months.
Published by Globes, Israel business news - en.globes.co.il - on November 29, 2023.
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