The total amount of new home mortgages was €47 billion in the first half of 2024, down 36% year-on-year.
New home loans fell to their lowest level in 10 years in the first half of the year, according to data released Monday by the Banque de France, in a market where buyers, stuck between rates still high and prices that don’t go down or go down only slightly are becoming rare.
The total amount of new real estate loans excluding renegotiations was €47.3 billion between January and June, down 36% year-on-year and the lowest since 2014.
The average interest rate for these new loans is however a little more favorable to borrowers, according to the same source, going from 4.17% in January to 3.70% in June.
These rates exclude taxes and insurance. Including costs, rates have gone from 4.79% to 4.62% from the first to the second quarter over a period of twenty years or more, according to the Banque de France. This is a real shock to households’ real estate purchasing power: in the first quarter of 2022, this rate was still two and a half times lower, at 1.80%.
Too high prices and political uncertainties
While this slight downward movement and bank demands are likely to energize the market, real estate prospects are not rushing to the gate.
The main obstacle is common to all market players: still high property prices. The political context of June has added a certain degree of uncertainty and a wait-and-see attitude on the part of families.
In the second quarter, “the market environment was weak” for real estate loans, commented Claire Dumas, CFO of Société Générale, last Thursday, “due to a more uncertain and wait-and-see environment, especially after the dissolution” of the National Assembly.
Towards a “gradual recovery”?
Banks and intermediaries also believe that the market is hampered by certain rules decreed by the High Council for Financial Stability (HCSF), which regulates, among other things, the conditions for granting real estate credit, particularly in terms of rental investments.
THE signs of recovery they are timid: the production of new real estate loans excluding renegotiations reached 8.6 billion euros in June, the second least negative month since the beginning of the year, behind April.
They could ease in July and August, which are generally quiet months for real estate transactions. The Banque de France, however, expects a “gradual recovery,” but several stabilizations mentioned for April 2023 and December 2023 ultimately did not hold up.