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International briefs

September 09, 2010 03:15PM

From the New York September issue: Prices in the Israel housing market have risen more than 20 percent over the past year, and the Bank of Israel is warning that a bubble will develop if they continue to rise at that pace, according to BuyItInIsrael.com and the Jerusalem Post. At the end of July, the bank raised interest rates for the month of August to 1.75 percent from 1.5 percent to help stem the surge in home prices. The bank is expected to increase interest rates over the next year to 2 percent or 2.25 percent. A directive was also recently issued to Israel’s banks, ordering them to examine their housing credit portfolio. Lenders are now discouraged from offering homebuyers loans for more than 60 percent of the value of a property, when before the directive they would lend up to 70 percent of the value. Therefore, banks are likely to demand buyers put in 40 percent of the property price, instead of the previous 30 percent. Click here for more real estate news from around the globe. Compiled by Yaffi Spodek