Brands selling homes or mortgages to Arab buyers in Israel usually build the offer around the general-market average. The verified data shows that average misses the mark. According to the Knesset Research and Information Center, the average housing loan in Arab localities in March 2021 was about ₪566,0001, against about ₪895,0002 in Jewish localities. And according to the State Comptroller’s report on the mortgage market, as reported by Ynet, 73%3 of mortgages taken in Arab society from 2024 onward were arranged with an external mortgage adviser, compared with 59%4 in the population as a whole. The picture is of a market where people borrow less, finance a smaller part of the property with the loan and rely more on a mortgage adviser, and which the regulator itself only partly understands. Here is what the data says, where it stops, and what banks, developers and mortgage advisers can do with it.

Smaller loans, lower financing

The Knesset Research and Information Center paper of May 2023 brings together Banking Supervision and Central Bureau of Statistics data on housing loans in Arab society. Beyond the gap in loan size, the paper shows that the financing rate, the share of the property’s value covered by the loan, was clearly lower in Arab localities than in Jewish ones. According to the CBS data it cites, in 2018 only a small minority of Arab households held a mortgage, against a far larger share of Jewish households. That counts all households holding a mortgage, whenever it was taken, not that year’s buyers.

These figures need reading within their limits. The comparison is between Arab and Jewish localities, so it does not necessarily describe Arab buyers in mixed cities. Nor is the data recent: the whole mortgage market has changed since March 2021, as we show below.

The data does not explain the gap, and several explanations are possible. Families may prefer to fund more of the purchase from their own money; they may also be getting less credit than they would like. In our view, these forces are probably at work together, in proportions that vary from locality to locality. What is clear is that a mortgage calculator, an advert or a product built around the average loan in Jewish localities is talking to a different buyer.

Income sets the ceiling

According to the Israel Democracy Institute’s statistical report on Arab society, based on National Insurance Institute data, the average wage per month worked for someone living in an Arab locality was ₪9,0345 in 2022, against ₪14,6876 for someone living in a Jewish locality. Here too the comparison is by place of residence, not by the worker’s group, and mixed cities are not included.

Mortgage repayments come out of income, so in our view the wage gap explains part of the gap in loan size: a family that earns less can carry a smaller monthly repayment, and therefore a smaller loan. Even so, in our view averages like these hide a wide spread between regions, localities and households, so it is better to segment by region and income than to assume a uniform audience.

A market the state barely measures

According to the State Comptroller’s report, as reported by Ynet, mortgages to home buyers from Arab society were in the past a tiny share of all mortgages in Israel, far below Arab society’s share of the population. Newer data shows a much smaller gap: the Knesset Research and Information Center paper, citing Banking Supervision data, puts Arab society’s share of home purchases made with a housing loan much higher by 2018, and much closer to its share of the population. This 2018 figure measures something different from the CBS one above: not households holding a mortgage, but Arab society’s share of the home purchases financed with a housing loan. For scale: at the end of 2023 Arabs were 20.9%7 of Israel’s residents, East Jerusalem included, according to the Israel Democracy Institute.

The Comptroller’s report also says that the Bank of Israel does not hold the basic data needed to set policy in this area, and that the last inter-ministerial team on the issue never published its conclusions. The latest verified figure we found for Arab society’s share of home purchases made with a housing loan is the one for 2018; we found none for the years since.

For marketers this is both a problem and an opportunity. A problem, because there is no current national number to size the market against. An opportunity, because a bank, developer or advisory firm that measures its own activity by locality and by the language of the enquiry holds a picture nobody else has, the regulator included.

The adviser is the way in

For anyone marketing housing to Arab buyers, the Comptroller’s finding on mortgage advisers may matter most. When 73%3 of mortgages in Arab society are arranged with an adviser, against 59%4 in the population as a whole, the adviser is not just another channel but the route most of these mortgages take to the bank. According to the same report, the field is not regulated by law: there is no licensing requirement, no qualifying exam and no regulator supervising those who work in it.

A hypothesis the data does not test: when loans are smaller, financing rates lower and even the central bank lacks data, borrowers look for someone who knows the banks from the inside and can tell which bank will approve their case, and on what terms. If that is right, the adviser holds knowledge that banks and developers need, and influence over which of them the borrower chooses. On the other hand, it is a channel whose quality nobody checks, and the reputation of anyone who works through it rests on it.

The backdrop: bigger, riskier mortgages

All this is happening in a market that has changed fast. According to the State Comptroller’s report, as reported by Ynet, the average mortgage in Israel jumped between 2020 and 2025, the average monthly repayment rose between 2019 and mid-2025, and the share of loans defined as high-risk rose between January 2022 and July 2025. The same report also describes the spread of new-build deals in which most of the price is deferred until handover. These are national figures, not figures for Arab society.

In our view, for a borrower on a lower income with a thinner margin, such structures push the risk forward, to the handover date and the years after it. A developer marketing them to Arab buyers should show the future payment in full, in shekels and in Arabic, from the very first offer.

Some questions remain open. We found no verified data on how Arab families who do not take a mortgage pay for a flat or a house. We have left the state’s discounted-housing programmes and the land tenders in Arab localities out of this article: the data we verified on them comes from press reports, and they deserve an analysis of their own.

What it means for marketers

The data points to borrowers who take smaller loans, finance less of the property with them, earn less and rely on an adviser to reach the bank, in a market the regulator itself only partly understands. This is where we would start:

  • Build the offer around the real borrower, not the average. Examples, calculators and adverts in Arabic should show loan sizes and financing rates that fit Arab localities, not the general market’s numbers.
  • Sell the monthly repayment, not just the price. When pay is lower, the deciding question is how much leaves the account each month and what happens at handover. Show the full payment schedule, deferred payments included, from the first contact.
  • Work with mortgage advisers, and choose them carefully. Most mortgages in Arab society since 2024 have gone through an adviser. Give advisers material in Arabic and transparent terms, and remember that in an unregulated field their quality is your reputation too.
  • Measure it yourself. The Bank of Israel itself lacks basic data on this market. Break down your enquiries, approvals and deals by locality and by language, and you will hold a picture of this market that no public report has.
  • Segment within the audience. The pay gap between localities is wide, and in our view there is a wide spread within Arab society too. The data here covers Arab localities, not mixed cities, so test offers by region and type of locality before building separate products.