The volume of mortgages taken by households continues to rise. According to Bank of Israel figures, new mortgages taken in the second quarter totaled NIS 14.8 billion, compared with NIS 13.1 billion in the corresponding quarter last year. The Bank of Israel added that new mortgages in July were unseasonably high at NIS 5.8 billion.
Household debt grew NIS 8 billion, 1.5%, in the second quarter of 2018, reaching NIS 544 billion. The Bank of Israel stated that the annualized increase in non-housing debt that began in late 2016 continued to slow with an increase of only NIS 900 million in the second quarter, 0.5%, to NIS 195 billion. Debt for housing purposes, however, was up 2%.
The business sector's debt increased by NIS 13 billion in the second quarter, 1.5%, reaching NIS 903 billion. Most of the increase resulted from a 3.9% shekel depreciation against the dollar and a 1.2% increase in the Consumer Price Index, which increased the value of foreign currency-denominated, foreign currency-linked, and index-linked debt. Also contributing to the increase in debt was a NIS 3.6 billion quantitative increase attributable mainly to an increase in marketable bonds in Israel, somewhat offset by a decrease in debt from non-marketable bonds and overseas debt.
In the second quarter, the business sector, excluding banks and insurance companies, issued NIS 9.4 billion in bonds, compared with an average of NIS 12 billion a quarter in the past two years. Debt issues by real estate and construction companies stood out in the second quarter, accounting for 59% of total issues. In July 2017, the slowdown in bond issues by the business sector continued, with the total reaching NIS 1.6 billion.
The spread between the yield on the Tel Bond 60 linked corporate bond index and the yield on the linked government bonds widened by 0.08% to 1.29%, continuing the upward trend in the spread since late 2017. The spread continued to widen in July 2017, reaching 1.30%.
Published by Globes [online], Israel business news - www.globes-online.com - on September 17, 2018
© Copyright of Globes Publisher Itonut (1983) Ltd. 2018