In May 2024, the Israeli real estate market reached a milestone with the average mortgage amount surpassing one million shekels for the first time since 2022. This increase results from a complex economic and geopolitical environment, where rising housing prices and resilient buyer activity have redefined market dynamics despite high interest rates.
Significant Figures
Total mortgages in May reached approximately 7.8 billion shekels, the highest since August 2022. This record is partly due to delayed April applications impacted by Passover holidays but also reflects a notable resurgence in buyer and investor activity.
Investors and Buyers: Divergent Strategies
Investors took out average loans of 1.07 million shekels, showing renewed confidence despite economic uncertainties. Non-investor buyers averaged 1.01 million shekels, while subsidized housing buyers recorded average mortgages of 976,000 shekels.
High-Risk Loans
A significant point is the proportion of loans exceeding 60% of property value, accounting for 45% of new mortgages. This trend indicates increased risk-taking, with monthly payments averaging 29.3% of borrowers’ incomes. Additionally, 46% of loans taken exceed 30% of borrowers’ incomes, highlighting considerable financial pressure on households.
A Complex Economic and Geopolitical Context
This dynamic reflects the influence of economic and geopolitical conditions on the Israeli real estate market. High interest rates and economic uncertainty initially slowed purchases, but continued rising housing prices and the need to secure properties in times of instability eventually drove many buyers back to the market.
