Real estate credit: rates drop but real estate applicants remain cautious

The beginning of the decline in rates and the once again aggressive banks do nothing for the moment: the total amount of new real estate loans continues to collapse, according to Banque de France data published on Monday. The amount of new real estate loans, excluding renegotiations, fell again in March, to 6.7 billion euros, the lowest volume in almost ten years. The previous month it was 7.4 billion euros.

However, the average interest rate for these new loans is more favorable to borrowers, according 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%). . These rates exclude taxes and insurance. Including costs, the rate from January to March was 4.79% for a period of twenty years or more, according to the Banque de France.

While this downward movement and bank demands are likely to stimulate the market, real estate candidates are not rushing to the gate. The main obstacle is common to all market operators: the still high property prices. The cost of credit, significant for loan candidates even with the start of the decline in rates, weighs on families’ real estate purchasing power.

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 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.

The first quarter meeting, which was never officially announced, was held well but through “a written procedure”, Bercy told AFP on Monday, confirming information from the Echoes. It didn’t result in any changes.

Leave a Comment