Mortgage Applications Show Housing Demand Still Strong, Experts Say

Construction in Beitar Illit. (Nati Shohat/Flash90)

Talk of a softening housing market is apparently just that, as the figure that economists believe most accurately reflects housing demand – the amount of mortgage money borrowed – was a healthy NIS 4.55 billion in May. That figure was 15 percent lower than the amount taken out in May 2016, and  3 percent lower than the average monthly amount over the past 12 months – but economists said that it showed that demand for housing was still very strong.

In the first quarter of 2017, homebuyers borrowed NIS 13 billion in mortgage money, compared to NIS 12 billion in the previous quarter, and NIS 15 billion in the same period in 2016. Housing prices rose 4.4 percent since the beginning of 2016. The average interest rate for inflation-adjustable mortgages was 3.74 percent in May, compared to 3.88 percent in April. For mortgages with a set interest rate, the figures were 4.31 percent and 4.39 percent respectively.

With that, there has been a softening of sales. A total of 8,800 homes were sold in March 2017, 18 percent fewer than in the same month a year earlier. However, sales in March were 8 percent higher than in February. Economists told Globes that the lower overall sales figures could be due to lower interest by foreign buyers for Israeli real estate. Among Israelis, however, demand was still quite high, as reflected in the strong mortgage figures.