Mortgage Market in Israel: A Tale of Two Statistics

Strategic Insights -

A sharp decline in housing market activity over the past few months is evident in almost all official figures, yet one key statistic remains high: the amount of new mortgage loans taken by the public. According to Bank of Israel figures, new mortgage loans reached NIS 10.6 billion in July, the highest since November 2024. This discrepancy has raised questions about the current state of the mortgage market in Israel.

Key Takeaways:

  • The number of new mortgage loans remains high, with NIS 7 billion being taken in January and February, and NIS 9.16 billion in March, indicating a disconnect between market trends and mortgage figures.
  • Despite a 20% decline in sales, the total amount of new mortgage loans reached NIS 10.6 billion in July, the highest since November 2024.
  • The "maturing" of special financing offers, which allowed buyers to put down as little as 15% or 10% of the home price, is a key factor in the increased mortgage demand, as buyers now need to take out mortgages to meet payment terms.
  • The "Home at a Discount" scheme, in which buyers must secure a mortgage in accordance with a preset timetable, contributes to the high mortgage figures.
  • Many instances of mortgage recycling have been observed, with individuals taking out new mortgage loans to replace existing ones and improve repayment terms.
  • The impact of the Swords of Iron war and its effects, such as delays in home sales, has also contributed to the delayed mortgage loan stage.
  • Experts believe that the disconnect between mortgage totals and deal volumes will eventually be resolved, with mortgages slowing synchronizing with market activity.

Statistics:

  • NIS 7 billion: The amount of new mortgage loans taken in January and February.
  • NIS 9.16 billion: The amount of new mortgage loans taken in March 2025.
  • NIS 10.6 billion: The total amount of new mortgage loans reached in July 2025, the highest since November 2024.
  • 20%: The decline in sales in the housing market over the past few months.
  • 15%: The minimum down payment required in some special financing offers.
  • 10%: The minimum down payment required in some other special financing offers.
  • 6%: The decrease in home sales between May-July 2024 and February-April 2025.
  • 20%: The decrease in home sales between May-July 2024 and May-July 2025.
  • 8,160: The number of homes sold on the open market in June 2024.
  • 21,640: The total number of homes sold in the period May-July 2025.
  • 25 years: The period over which the decline in deal volumes in the second quarter of 2025 is among the weakest.
  • 10 years: The period over which the decline in deal volumes in the second quarter of 2025 is compared to the corresponding period in 2024.

Sources:

  • Bank of Israel figures
  • Ministry of Finance surveys
  • Central Bureau of Statistics figures
  • Israel Mortgage Advisors Association (Avi Gabbay)
  • Sela Investments and Finance (Liran Sela)