“Today, we have conditions that are becoming more favorable again,” says François Villeroy de Galhau

The governor of the Bank of France, François Villeroy de Galhau, is the guest of “8h30 franceinfo” this Wednesday March 13.

“Today, we have conditions that are becoming more favorable again” in the real estate sector, affirmed Wednesday, March 13, on franceinfo the governor of the Bank of France François Villeroy de Galhau, while the amount of new real estate loans granted in 2023 fell to the lowest since 2015.

Yet “the banks have put themselves back in a position to make real estate loans”, assures the governor of the Bank of France. “Rates are starting to stabilize”he recalls. “I really believe that you have to go and test your banker” for obtaining credit. According to the central banker, “today, there are no more problems of difficulties on the credit supply side” but “the French themselves remain quite wait-and-see”. A wait-and-see attitude which is not only explained by the hope of seeing housing prices fall in the coming months, but also by “personal variables”, according to the governor of the Bank of France. He thinks “that there are also things that do not relate to financing and credit. There are standards, there are problems with land supply.” “When the Prime Minister spoke of simplifying, of debureaucratizing, I am not a specialist in the sector, but I believe that there is really something to be worked on there”he says.

“Avoid over-indebtedness”

François Villeroy de Galhau returned to the“relaxation” rules encouraged by the central bank governing real estate credit in order to wake up the sector. “If tomorrow you get a refusal” real estate credit, “we have asked the banks to put in place a review procedure.”

The Banque de France thus encouraged French banks to set up a system of “review” refused real estate loan applications. “We have relaxed them in a reasonable manner, because these criteria are used to avoid over-indebtedness” borrowers, however, specifies François Villeroy de Galhau. The latter may also deviate from the maximum loan duration limit of 25 years, to go up to 27 years, if work represents 10% of the total amount of the operation.

If banks still do not have the right to sign a real estate loan if the total amount of borrowers’ expenses related to housing exceeds 35% of their income, in 20% of cases, they can now circumvent these limits, provided that this primarily concerns primary residences and targets, in almost a third of cases, first-time buyers.