With the drop in rates, the purchasing power of buyers has increased by 5% since January

Thanks to lower rates, buyers’ borrowing capacity increases. But the cards could be completely replaced with the result of the legislative elections.

Good news if you want to buy a house or apartment. The purchasing power buyers increases by 5% on average in six months, according to a study by the broker Empruntis. It thus returns to almost the same level as a year ago.

For a monthly payment of 800 euros without insurance, families will find a loan capacity over 20 years of 134,000 euros (compared to 128,000 in December 2023), according to Empruntis estimates.

This dilution is due to the drop in taxes observed for six months. After reaching a peak of nearly 4.5%, they have fallen every month since January. In June 2024, they will drop to 3.8% in 20 years and to 3.95% in 25 years.

This gain in purchasing power, obviously, will not compensate for the sudden drop from 2022, but borrowers can benefit from the margins of negotiation when there is competition between banks. Some profiles may therefore manage to lower their rate as well.

“Banks are currently making discounts on the files they want to capture and which can be significant: 3.6% or 3.7% in 25 years versus 3.95% in scale for example,” assures Empruntis.

The first buyers can also take advantage of certain advantages, with loans “from 15,000 to 25,000 euros, at zero interest or lower than the long-term loan, with sometimes different eligibility criteria”, states the study. We also note a return of young people among borrowers, with the proportion of those under 30 growing from 25 to 28% between 2023 and 2024.

Uncertainties before the legislative elections

Credit restrictions, however, remain a pebble in the shoes of the wealthiest borrowers. In fact, the rules of the High Council for Financial Stability limit the debt rate to 35% (insurance included) and the duration to 25 years (and to 27 years in case of renewal or purchase of new property).

So for borrowers who have the means, Empruntis begs to take into account the rest of his life. The credit and insurance broker notes, however, that a room for maneuver exists to obtain an exemption.

Despite this increase in purchasing power, a major event has thrown the sector into a wait-and-see attitude. Since the dissolution of the National Assembly the real estate market is at a standstill.

We have to wait for the results of the next legislative elections to know if the tax rate will continue to fall. Finally, if a new government takes office, it could decide on new directions for housing policy.

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