Volume of new mortgages granted in 2012 up 4%
Photo: Index Open
Household debt up NIS 19B in 2012
Amount of money Israeli households owe financial institutions increased by 5.5% to NIS 383 billion, Bank of Israel says. Balance of housing debt goes up 6.9% to NIS 269.4 billion
The volume of new mortgages taken out by households in 2012 grew 4% compared to 2011, totaling some NIS 47 billion (about $12.6 billion).
Figures released by the Bank of Israel's Information and Statistics Division reveal that the overall balance of household debt, for housing and not for housing, grew in 2012 by some NIS 19 billion (5.5%), totaling about NIS 383 billion ($103 billion) at the end of the year.
The balance of housing debt grew by about NIS 17 billion (6.9%) during the course of the year, and at the end of 2012 stood at NIS 269 billion ($72 billion), following an increase of about NIS 18 billion ($4.8 billion) recorded in the balance of housing debt in 2011 and about NIS 24 billion ($6.4 billion) in 2010.
Pleasant Surprise
Government's debt-to-GDP ratio expected to total 73.5% in 2012 compared to 74.1% in 2011. Israel also only country in West whose credit rating has increased since 2008
According to the central bank, The limitations on the loan-to-value ratio imposed by the Supervisor of Banks in the beginning of November 2012 are expected to only be reflected in 2013.
The presented figures were compiled after the Bank of Israel made a change in definitions last month, which was followed by a drop of some NIS 7 billion ($1.9 billion) in the balance of housing debt.
The reason for this sharp decline in the balance of housing debt according to the new calculation method is that the mortgages granted to foreign residents have been excluded from the Bank of Israel's monthly reports.
The central bank's figures also reveal that in 2012 there was virtually no change in business sector debt, which increased by just 0.1%, remaining around NIS 782 billion ($210 billion).
Bond issuances by the non-financial business sector increased by around 8% in 2012, to some NIS 28 billion ($7.5 billion). Bond issuances by companies rated AA– or higher accounted for about 60% of total issuances, compared with only 34% in 2011.
