Banks granted NIS 3.4 billion in new mortgages in March 2012, 14.4 percent more
than the NIS 3b. granted in both February and January, the Bank of Israel
The amount of new mortgages in March was 44% higher
than the low point of NIS 2.3b. last October, three months after the Bank of
Israel tightened mortgage terms, capping the variable-interest component of a
mortgage to one-third of the total. The total of variable-interest mortgages
rose 42% in the October-March period, although their proportion of total
mortgages fell from 75.8% to 74.5%.
During the period, the Bank of Israel
cut the interest rate from 3.25% in September to 2.5% in February. Many
economists expect the central bank to keep the interest rate at this level for
several months and to begin raising it toward the end of the year.
biggest increase in new mortgages in March was in variable-interest mortgages,
both linked to the Consumer Price Index and unlinked, which rose 13.7% to NIS
2.55b. in March from NIS 2.24b. in February. New fixed-interest mortgages
rose to NIS 872 million in March from NIS 750m. in February.
The Bank of
Israel has said the interest-rate cuts would not reinflate the mortgage market
because macro-prudential measures taken to restrict lending would counter the
rate cuts. However, the minutes of the central bank’s monetary council for the
April interest-rate decision indicate that it is again considering intervening
in the mortgage market.