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Introducing the Sector

The PCMA carries out the supervision and oversight of the mortgage finance sector in accordance with the Capital Market Authority Law No. (13) of 2004, based on its primary objective of creating the appropriate climate to achieve stability and growth of capital and protect the rights of investors.

Looking at the reality of mortgage finance today, banks dominate the primary market (direct lending) of the mortgage finance sector due to the high liquidity enjoyed by the Palestinian banking sector, the high prevalence of its branches and the provision of various services, which has challenged mortgage finance companies to compete and operate within the primary market.

As for the secondary market, the Palestine Mortgage Finance Company, which was established in 1999, and its financing arm, the Palestinian Mortgage Finance Company, are still the two companies licensed to work in this market, and they had a significant impact on the extension and expansion of the mortgage finance market, as they had played a major role in encouraging banks to finance real estate, by providing refinancing of their portfolios specialized in mortgage loans. However, given the high liquidity enjoyed by banks in Palestine, and the accompanying accommodative and stimulus monetary policies of various central banks around the world, specifically the US Federal Reserve, in addition to the expansion of informal activity in the field of real estate financing, these factors, together, formed an obstacle to the ability of companies operating in the secondary market to continue providing refinancing loans.

However, with the recent developments in monetary policies to become more tight (Hawkish), and the hints made by the US Federal Reserve recently regarding raising interest rates more than once during the year 2022, and since we are not isolated from the global economy, we expect the company to have a real opportunity to return and resume its activity in refinancing the loan portfolios of banks, because the banks will be forced to raise the interest on their deposits, and thus increase the cost of mortgage financing loans.

As for real estate appraisal, and given the importance of this profession in determining the value of real estate securities on the basis of which loans are granted, the PCMA is committed to what is stated in the Instructions for Licensing Real Estate Appraisers for the year 2012 in terms of granting a license to those with experience and competence, and then monitoring and supervising the appraisers. The PCMA organizes training courses and subsequent examinations as one of the conditions for obtaining a license.