This is a first in more than 7 years: the production of new housing loans excluding renegotiation fell below 10 billion euros in August, according to an announcement from the Banque de France this Thursday October 5. The total amount of new real estate loans for the month of August amounts to 9.9 billion euros, the highest amount since March 2016.
The tide has since turned on this market, after months above 20 billion euros such as in October 2020, May, June and July 2021 or even April and May 2022, driven by a catch-up effect after periods of confinement for 2020 and 2021 and the desire of borrowers in 2022 to benefit from attractive rates before the announced increase.
Rates too high
The average interest rate has multiplied by three and a half in the space of 18 months: it is expected in September at 3.81% excluding fees and insurance for new loans excluding renegotiations, according to an initial estimate from the Bank of France. This rapid increase is explained by the policy of central banks to counter inflation, which increases the cost of money for banks, the latter passing it on to their clients to maintain their margins.
Banking establishments are therefore less active in this market and potential buyers, hoping for a drop in prices, are also fewer in number, leading to a drop in the number of transactions. The total outstanding amount of real estate loans is starting to plateau, at around 1.3 trillion euros. However, it remains four times higher than 20 years ago.
More first-time buyers
The Banque de France took advantage of this monthly publication to once again affirm the good access of first-time buyers to real estate credit, an angle of attack regularly used by brokers requesting a relaxation of the rules governing this category of loan.
According to her, the share of first-time borrowers using a home loan for the acquisition of a main residence continues to represent around half of the production of loans in 2023, a proportion slightly higher than the average observed since 2015″.
On September 26, the High Council for Financial Stability (HCSF), which brings together the Minister of the Economy and the governor of the Bank of France, decided to keep the rules for granting real estate credit unchanged, judging that a Easing would not resolve market difficulties.