some adjustments but no big change

The High Financial Stability Council met on Monday while the real estate market seems to be at a standstill. The rules governing real estate credit have been marginally revised. For example, it will be possible to borrow for 27 and not 25 years if the buyer needs to carry out major thermal renovation work.

There is no revolution in sight for real estate loans. Rates continue to soar and the real estate market finds itself almost at a standstill. On the one hand, buyers no longer have the means to borrow and on the other, sellers do not lower prices, and the situation seems to be stuck. The sector therefore expected a lot from the announcements of the High Financial Stability Council (HCSF) which met on Monday December 4. And he ultimately remains hungry.

The HCSF carried out what it modestly calls “technical adjustments”. It does not touch the fundamentals of real estate credit, that is to say 35% maximum debt (monthly payments cannot exceed 35% of income) and no loan for more than 25 years. However, he decided on an exception – and this is the main announcement of the day: if the buyer must carry out thermal renovation work which represents more than 10% of the real estate transaction, in this case, it will be possible to borrow over 27 years.

Furthermore, bridging loans will be excluded from the effort rate, the famous 35%, provided that they do not represent more than 80% of the value of the sale. Finally, you should know that banks can deviate a little from these rules. 20% of the credits they grant may not respect the 35% debt limit. Banks take stock quarter by quarter. To avoid shocks, the HCSF decided to smooth these standards over three rolling quarters. Finally, in the event of credit refusal, a review of the file will now be possible.

The French borrow on average at 3.94%

The system is therefore not turned upside down with these “technical adjustments”. Bercy explains that the sector has normalized, that the key rates of the European Central Bank have increased to limit inflation and that the mission has been accomplished. Borrowings fell, their number was halved in the third quarter but the total volume was up 2%. The situation is not catastrophic because in France, we now borrow on average at 3.94%: this is less than in Germany at 4.2% or in Italy, at 4.7%.

Despite everything, the real estate market is in shambles. Rates have quadrupled in two years, recall professionals in the sector. This means that we can borrow much less: a quarter less in two years. The problem is that real estate prices have not fallen at all, only −1.1% in the last quarter. And the measures announced Monday December 4 will not wake up the market.