Israelis too an unexpected all-time monthly record NIS 13.8 billion in mortgages in December 2024, according to preliminary data from the Bank of Israel. This figure included a record high of NIS 3.2 billion in 'balloon loans' taken to finance the sale of new homes with a 10% or 20% down-payment by the buyers, as well as a record in loans for general purposes.
December's figure was double the monthly average of mortgages taken in the rest of 2024. The high amount was probably due to more intensive marketing of new apartments by developers before the 1% hike in VAT and the desire of buyers to also avoid paying the higher 2025 purchase tax rate.
Last month was the first time since July 2022 that monthly mortgage taking exceeded the NIS 10,000 threshold and beat the previous monthly record for mortgage taking of NIS 13.4 billion in March 2022, as buyers rushed to beat the hikes in interest rates, which began in April 2022.
The NIS 3.2 billion taken in balloon loans was more than double the previous record taken in July 2023 and estimates are that real estate developers are very concerned about 2025, not only because of the VAT hike, but also because of the economic situation, which could worsen, leading to very large declines in apartment purchases, which could see them become financially troubled.
Published by Globes, Israel business news - en.globes.co.il - on January 14, 2025.
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