The recovery in real estate lending, which began in the spring, increased significantly in July, benefiting from the easing of monetary policies, according to figures published by the Banque de France on Friday 6 September.
New housing loans, with all maturities combined and excluding loan renegotiations, reached €11.3 billion in July, their highest level since May 2023. Compared to the low point reached in March at €6.9 billion, the rebound thus reached 64%.
The sharp decline observed since mid-2022, a consequence of the rapid increase in interest rates orchestrated by the European Central Bank (ECB) in an attempt to curb inflation, is far from being erased. Before this phase of rapid decline, the monthly production of new housing loans had peaked at over €22 billion in May 2022.
The quarter-point cut in the main interest rates decided by the ECB in June, widely anticipated by financial markets, had a notable impact, although it is not the only cause of the rebound. “Three elements are coming together to promote market recovery: a significant drop in interest rates, a drop in property prices and, although not all households are feeling it, a recovery in purchasing power, thanks to the slowdown in inflation and the increase in wages.”specifies Marie-Laure Barut-Etherington, deputy director general of the Banque de France.
A downward movement that should continue
The average interest rate on new loans (excluding fees and insurance) returned to 3.64% in July according to the Banque de France, down more than half a percentage point compared with the January peak of 4.17%. And this trend is expected to continue: the Observatoire Crédit Logement/CSA, in its latest edition published on Thursday 5 September, based on different data, points to an average rate of 3.65% in August and predicts a new phase of decline.
This is enough to fuel optimism among credit brokers, most of whom have suffered from a drop in transaction volume over the past two years. Several of them welcome the renewed commercial dynamism of the major French banks, a change of attitude linked to the gradual restoration of their margins.
However, no one imagines a return to the highs of the years 2015-2022 in the short or medium term, mainly because rates are expected to remain above their near-zero levels of this period, but also because the uncertain political context in France continues to slow down investment in rentals, a market segment sensitive to tax concerns. In July, first-time buyers accounted for half of loans for new homes, compared with just over 40% three years ago.
