20 September 12 15:33–The housing market is bubbling. An all-time high of NIS 5.8 billion in new mortgages were taken in August 2012, the Bank of Israel reported today, in line with preliminary estimates by “Globes”. The amount of new mortgages was 70% above the monthly average for the 12 preceding months of NIS 3.4 billion.
In addition, individuals took out an additional NIS 450 million in loans for purposes other than buying a home, using their home as collateral, bringing to the total amount of loans to NIS 6.2 billion in August.
Most of the increase in mortgages was in unlinked mortgages, which totaled NIS 2.4 billion in August, 24% more than in July. Consumer Price Index (CPI) linked mortgages were still the larger segment, amounting to NIS 3.2 billion in August, 12% more than in July.
Variable interest mortgages accounted for the largest segment, amounting to NIS 4.3 billion in August, 74% of all mortgages taken during the month.
One reason for the large amount of new mortgages in August was because buyers brought forward purchases to avoid the VAT hike which came into effect on September 1. Additional factors were the low interest rate and the public’s assessment that real estate prices will not fall…Read More>>