Mortgages at Israeli banks rise amid ongoing house price boom

Total mortgages on the books of leading Israeli banks continued to rise last year on the back of a decade-long boom in house prices.

Bank Leumi, the largest bank in the country by assets, saw its mortgage book increase 15% year on year in 2020, to $28.1bn from $24.4bn in 2019. It follows a 14% year-on-year rise between 2018 and 2019.

At Bank Hapoalim, the country’s largest lender by Tier 1 capital and second largest by total assets, mortgages rose by 19% year on year to $30.9bn in 2020 from $25.9bn in 2019.  This follows a 38% rise between 2018 and 2019. However, the bank did see a 36% dip between 2016 and 2018, according to The Banker Database.

Mizrahi Tefahot Bank, the third largest by assets, also saw mortgages on its books rise 24% year on year to $48.7bn in 2020 from $39.2bn in 2019, following a rise of 16% between 2018 and 2019.

Israel Discount Bank, meanwhile, the fourth largest by assets, saw mortgages on its books rise 23% year on year in 2020 to $13.2bn from $10.7bn in 2019.

During the past decade, house prices in Israel steadily climbed, halting briefly in 2020 because of the Covid-19 pandemic, before resuming their rise this year, according to the Times of Israel, which reports that house prices in the country have almost doubled since 2011. The rise in prices has been driven by robust demand, population growth, supply-side limitations, and low interest rates. In the absence of government-led initiatives to address the issue, house prices are forecast to continue to increase.

Trends identified using The Banker Database, an online database providing comprehensive financial data and insight for 4000 of the world's leading banks in 190 countries. Contact us.