The market is becoming more and more favorable for buyers. In his last report The Bank of France observes “a clear rebound” of the production of real estate loans. While banks had been granting fewer and fewer real estate loans for about two years, the trend seems to have reversed since last April, when the production of housing loans (excluding renegotiations) reached 8.9 billion euros, compared to 6.9 billion the previous month. A dynamic that is confirmed since the month of July recorded a peak exceeding the 10 billion euro mark. Better still: the number of files financed jumped by 48.6% in August compared to last year, according to theHousing credit observatory/CSA.
“Banks wanted to grant more mortgage loans at the beginning of 2024, analyses Caroline Arnould, general director of CAFPI. However, demand was not there because rates were still too high. Banking establishments, behind schedule in their credit production target, are thus starting to finance more real estate projects. All the more so as they anticipate a drop in key rates, dictated by the before our era. The latter could lower this Thursday, September 12, the deposit rate – which serves as a basis for the credit conditions applied to banks – by 25 basis points to reach 3.5%. If this reduction is enacted, Banks will thus be able to grant loans more easily.
In other words, by anticipating this drop in rates and wishing to meet their objective of loans granted, the banks are more flexible and have already revised their requirements. “All banks have tended to lend more since this summer and are open to negotiation, particularly with the first-time buyers that they are particularly targeting”adds Caroline Arnould. Some banks may, for example, be less careful about 20% contribution required or can extend the loan term from 25 to 30 years to allow the customer to increase their purchasing power. “The negotiation margin can be made both on the interest rate, on borrower insurance and also on the duration of the loan”specifies the brokerage specialist.
It remains to be seen whether this more favourable context for borrowers will last. According to forecasts from the Observatoire crédit logement/CSA, the production of real estate loans should reach 150 billion euros by the end of 2024, and 160 to 170 billion euros in 2025. “The market is recovering and projections are for +15% on credit distribution in 2025”comments Sophie Ho Thong, deputy general manager of the brokerage group Finance Conseil.
As for rates, CAFPI is counting on a further drop to approach 3% at the end of the year, compared to 3.6% currently and 4.1% in January. “It’s a good time to buy,” advises Caroline Arnould. Especially since real estate prices continue to fall (-3% in one year in April, according to Best Agents/Lodging). And with supply still outpacing supply, sellers are willing to lower their asking price. “The year 2024 sees the emergence of positive dynamics with a increase in real estate purchasing power for French households. The rebound in demand and the stabilization of supply that we are seeing, after three years of increases, suggest new prospects for the real estate market”concludes Thomas Lefebvre, scientific vice-president of Se Loger/Meilleurs Agents. The number of sales of old homes should thus increase in the coming months to reach 771,000 transactions by the end of the year.