Rising interest rates force people to buy smaller and sometimes even to give up on becoming a homeowner. Interest rates have soared in recent months and things are going very, very quickly: for a 20-year loan, you now have to count on an average rate of 1.9%, whereas it was 1.7% at the start of the summer and around 1% last January. Above all, it’s not over! According to the Governor of the Banque de France, François Villeroy de Galhau, loan rates should rise to 2 or even 3% by the end of the year.
>> Real estate loans: “Today, almost no file escapes the problem of the wear rate”, more and more borrowers are giving up on their project
In question: the post-Covid recovery, the war in Ukraine, the context of inflation… Most European and American central banks have increased their rates and this is the domino effect. These increases have repercussions on customers, households and businesses. It’s the end of free money!
Today, banks are sifting through your income and your contribution. The rate of wear, the maximum threshold beyond which a bank cannot lend you money without exposing itself to penalties, is a barometer. The objective, originally, is to protect borrowers, to prevent banks from lending too much money to households who could not repay and would find themselves cornered. But the problem is that this attrition rate has now become so restrictive that more and more files are refused. These rates become eviction rates.
There is also a “scissor effect” because the price of real estate does not fall. Stone prices are still very high, especially in the big cities. In Paris, for example, the average price per square meter still exceeds 10,000 euros. According to the Meilleursagents.com site, the capital could see its prices drop within a year. Ditto in Lyon or Toulouse. Conversely, prices could increase in Marseille, Rennes or Strasbourg.