The mortgage market continues to collapse and is at its lowest level in 10 years

The mortgage market continues to collapse and is at its lowest level in 10 years
The mortgage market continues to collapse and is at its lowest level in 10 years

Although interest rates on real estate loans continue to fall, they still reach an average of 3.94% in March for all maturities combined.

The start of a drop in rates and banks becoming more aggressive are doing nothing for the moment: the total amount of new real estate loans continues to plummet, according to data from the Banque de France published on Monday May 6.

The amount of new housing 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, always excluding renegotiations). It was 7.4 billion euros the previous month.

As Sandrine Allonier, founder of Comnipresence and real estate expert, notes on

The average interest rate for these new loans is, however, 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 January peak. (4.17%).

Prices too high

These rates exclude fees and insurance. All costs included, the rate between January and March was 4.79% for a duration of 20 years or more, according to the Banque de France.

If this downward movement and calls from the banks are normally likely to boost the market, property candidates are not rushing to the gate. The main obstacle is shared by all market players: a still high property price.

The cost of credit, significant for loan candidates even with the start of a drop in rates, weighs on the real estate purchasing power of households.

The HCSF in the viewfinder

Finally, banks and brokers consider that the market is hampered by certain rules decreed by the High Financial Stability Council (HCSF), which regulates, among other things, the conditions for granting real estate loans, particularly in terms of rental investment.

The real estate 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Criticized by the Bank of France and emptied of its substance by several amendments, this bill was finally withdrawn last Monday by its author.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 the Economy Bruno Le Maire, has not yet been announced.

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