The number of real estate loans continues to fall, according to the Banque de France, this number has even reached its lowest level in almost ten years.
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The decline is colossal, if we only take the data for the month of November 2023, which the Bank of France published, Monday January 8, 2024, we observe a fall in loans for housing, of more than 8.5 billion euros. While this same institution was rather counting on a recovery, therefore an increase in the number of loans granted for the month of November. The Banque de France thought that the granting conditions were going to ease and that things were going to start again, but in fact, it is quite the opposite.
Many households, even with savings, saw their files failed and were forced to postpone their purchases. In question, still this increase in interest rates, in 2023, which we have talked about a lot. On average, rates are above 4% for requests over 20 years, or two points more than at the start of 2023.
This year, we can expect good news, according to the governor of the Bank of France, Villeroy de Galhau, unless there is a shock, there will be no new rate increases. The drop in rates should even begin, but, be careful, rather in the second quarter, therefore from this summer. In fact, as inflation slows, central banks no longer increase their key rates to curb it, this is what the European Central Bank does.
But you have to be a little patient, because it takes time for the commercial financial establishments (Société Générale, BNP, etc.), in other words the banks from which you make your loan requests, to pass on these decisions. It will also be necessary to observe the level of this decline. It may not be significant enough to revive a completely seized real estate market.
Feared job cuts in the sector
What could revive the market would be a real drop in property prices, but that’s a bit of the problem, it’s slow in coming. Particularly because sellers find it difficult to review their prices; unless they are cornered, they prefer to wait.
And in terms of new construction, it’s not much better. As buyers are unable to obtain their credits, demand weakens. So promoters adapt, scale back, reduce the number of programs. As a result, it is jobs that are impacted. Promoters are no longer renewing fixed-term contracts, and for some, are even starting to lay off workers. At the start of the year, building and housing professionals are sounding the alarm. They should be received very soon by the Minister of the Economy to find solutions.