Although interest rates on home loans continue to fall, they still average 3.94% across all tenors in March.
The start of the decline in rates and the once again aggressive banks are not intervening for the moment: the total amount of new real estate loans continues to collapse, according to data of the Banque de France published on Monday 6 May.
The amount of new real estate loans, excluding renegotiations, fell again in March, to 6.7 billion euros, the lowest volume in almost 10 years (6 billion euros in October 2014, again excluding renegotiations ). The previous month it was 7.4 billion euros.
As Sandrine Allonier, founder of Comnipresence and real estate expert, points out
However, the average interest rate for these new loans is more favorable to borrowersaccording to the same source, going from 4.11% in February to 3.94% in March, the second consecutive month of decline after the peak in January (4.17%).
Prices too high
These rates exclude taxes and insurance. Including costs, the rate between January and March was 4.79% for a term of 20 years or more, according to the Banque de France.
If this downward movement e calls from banks normally they are likely to stimulate the market, real estate candidates do not rush to the gate. The main obstacle is shared by all market players: a still high real estate price.
The cost of credit, significant for loan candidates even with the start of the decline in rates, weighs on families’ real estate purchasing power.
HCSF in the crosshairs
Finally, banks and intermediaries believe that the market is hindered by some rules decreed by the High Council for Financial Stability (HCSF), which regulates, among other things, the conditions for granting real estate credit, in particular in terms of rental investments .
The home loan market has been driven in recent weeks by a bill proposed by Renaissance MP Lionel Causse, supported by Bercy, aimed at reforming the HCSF.
Criticized by the Bank of France and emptied of substance by numerous amendments, this bill was eventually withdrawn last Monday by its author.
The date of the next quarterly meeting of the body, which brings together the governor of the Bank of France François Villeroy de Galhau and the Minister of Economy Bruno Le Maire, has not yet been announced.