By Irit Avissar
May appears to be a particularly strong month for mortgage taking due to concerns that the purchase tax on home purchases for investment might rise. Sources in the banking sector estimate that mortgage taking in May might cross the NIS 5 billion threshold, about 10 percent above the monthly average in the past year.
“The past month has seen hysteria for mortgage banks, and contractors have also witnessed and encountered huge demand,” a senior banking source said. Recent months have been strong in the mortgage market. Mortgages worth NIS 5.6 billion were taken in March, with more modest amounts of NIS 4.71b. in April, NIS 4.62b. in February and NIS 4.57b. in January
The positive sentiment began with the cancellation of former finance minister Yair Lapid’s 0% VAT plan, which brought many young couples off the fence and into the market. The aftermath of the cancellation is still being felt.
Another likely factor is that Finance Minister Moshe Kahlon plans to raise the purchase tax on homes bought for investment.