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So what are we doing?
“First, get control. There is no shame in stopping and replanning, and in the long run it is important to understand the numbers and data, so it is recommended to use an adviser from the Association of Mortgage Advisers, who is familiar with the details and knows how to describe the risks and opportunities responsibly.”
Bankers are confident that house prices will continue to rise
An attempt to paint a forward-looking picture shows that among experts in the banking system, the direction in which the industry is heading is clear: continued price increases and increased demand.
Yuri YunisThe head of Bank Leumi’s mortgage department said: “Israel has a shortage of more than 130,000 homes. Homebuyers who had been on the sidelines for more than a year realized that house prices were not falling and decided to return to the market, despite high interest rates and the existing inflationary scenario. Therefore, expectations of continued price increases are being realized, and 2024 seems to be recorded as a year of double-digit cumulative price increases.”
Ariella RandallsteinHead of Mortgage Systems at the People’s Bank: “As we have seen over the last year and a half, the demand for housing has not gone away at all – precisely because it is a real demand and given that it will take some time for interest rates to start to fall – it can be seen that the public is making their own decisions, looking at alternatives, and for many of the public, we estimate that there are no better alternatives at the moment. With the existing supply problems (which are getting worse) – this will lead to further increases in house prices.
Dro FeldmanMizrachi Tefahot Mortgage Branch Manager: “We have seen an increase in mortgage executions since the beginning of the year. Many clients have learned that the Bank of Israel’s interest rates are not expected to fall as they initially predicted, and, on top of that, apartment prices are not expected to cool down. As a result, clients who are able to raise equity are returning to the market (including investors), and they are increasingly using variable rate products. Assuming that the interest rates will fall at the next renewal date, what are the possibilities of “bridging” the high interest rate period? Given the increase in demand, I estimate during 2025. We expect apartment prices to rise.”
Hello AmoyelHead of mortgage department at Jerusalem Bank: “The high interest rate environment has led to a significant reduction in the number of mortgages throughout the banking system in 2023. In addition to this, the war has led to a relative stagnation in the banking sector. However, the demand for apartments in Israel is rigid, and the supply of apartments has been low for many years and has not met the level of demand, which has led to an increase in mortgage performance in recent months, which is expected to lead to a slow increase in apartment prices.”
So how does all this information factor into the big dream? Dana Cohen isn’t giving up. “Despite the challenges, the dream of a private home is not dead. We are just learning how to cope with the new reality, taking it one step at a time, seeking help from professionals and planning the steps with the most precision possible according to our abilities.”
Shimi Adziashvili, Vice Chairman of the Association of Mortgage Counselors Conclusion: “During these complex times, it is more important than ever to get professional advice and look at the big picture before making major financial decisions. With proper planning and an understanding of market trends, the path to your dream home is still possible, even if it takes longer than before. Understandably, many people tend to focus on immediate survival, but this is exactly why it is recommended that professional advisors be involved in the process and work together to maximize the transaction for the client’s benefit.”
The 2024 Mortgage Conference under the banner of the “Israel Economic Front” will be held on July 30 in the lobby of the Modi’in Residence, with the participation of senior officials from the banking and financial industry, members of the Israeli Knesset and public figures.
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