Although the number of new mortgages in Israel dropped by 10% in August 2019, the total amount of new mortgages issued since January 2019 increased to a record 45 billion shekels ($13 billion), a jump of 30%, according to a report by the Bank of Israel.
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The report attributed the rise in the amount of new mortgages to an increased number of new mortgages taken out under the government-subsidized Mehir Lemishtaken ("Move-In Price") program for first-time homebuyers. Under the terms of Mehir Lemishtaken, buyers are allowed to take out a mortgage for up to 90% of the price of an apartment valued up to 1.3 million shekels ($370,000), in contrast to a minimum down payment of 25% required to take out a mortgage under general terms.
The Finance Ministry launched the 90% mortgage terms in 2018, hoping to help new homebuyers, especially young families, find a solution to surging property values.
Near-zero interest rates have made housing a top investment in Israel. Israel's home prices have more than doubled in the past decade to an average of about NIS 1.5 million ($430,000).
