During March 2022, the Bank of Israel announced that interest rates would be rising for the first time since 2018. This led to March 2022 broken all records for the numbers of mortgages being taken out in the country, with NIS13 billion in mortgage loans extended during the month.
Recent years have seen Israelis enjoy historically low interest rates and this has boosted demand for consumer credit and mortgages/housing lending. However, deteriorating economic signs and rampant inflation during 2022 have led to interest rates increases, with many locals responding by becoming hesitant about taking on loans.
House prices in Israel continued to increase throughout 2021 and 2022 despite the attempts of the government to mitigate the impact of various factors that have contributed to rising real estate prices. Over the course of 2021, house prices increased by 11.
During 2022, several local credit card issuers began to offer consumers more options to engage with buy now, pay later. Buy now, pay later has already been available in Israel for many years and it has proven popular among local people who are interested in paying for their purchases in interest-free instalments, with many of these schemes linked to their credit cards.
During the forecast period, interest rates are expected to continue rising, with expectations that they will reach 2.75% by mid-2023.
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Aggregate of Consumer Credit and Mortgages/Housing. Gross Lending: The total value of loans advanced by institutions in a given year; data refers to single year only. Outstanding Balance: The collective amount owed by borrowers at the end of a given year; data refers to the cumulative impact of debt.See All of Our Definitions
This report originates from Passport, our Consumer Lending research and analysis database.
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