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 reached an average of 3.94% in March for all durations combined.

The start of a rate cut and the once aggressive banks are doing nothing, for the time being: the total amount of new real estate loans continues to fall, according to data of 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, still excluding renegotiations). It was 7.4 billion euros the previous month.

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

However, the average interest rate for these new loans is more favorable to loans 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%).

Prices too high

These rates exclude fees and insurance. All costs included, 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 is calls from the banks are normally likely to push the market, property candidates do not rush to the door. The main obstacle is shared by all market players: an ever-high property price.

The cost of credit, significant for loan applicants even with the beginning of a drop in rates, weighs on the real estate purchasing power of families.

The HCSF in the viewer

Finally, banks and brokers consider that the market is hindered by certain rules decreed by the High Financial Stability Council (HCSF), which regulates, among other things, the conditions for granting real estate credit, especially with regard to investment in rent

The real estate loan market has been driven in recent weeks by a project proposed by the Renaissance deputy Lionel Causse, supported by Bercy, aimed at reforming the HCSF.

Criticized by the Bank of France and emptied of its material by several modifications, this bill was ultimately withdrawn last Monday by its author.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.

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