The production of real estate loans should fall by 3% in 2022 compared to 2021, the Banque de France announced on Thursday, even if a sharper drop in loan creations is to be expected due to the rise in rates.
Excluding loan renegotiations, the production of new loans for the year 2022 “would amount to 218.4 billion euros”, according to the latest data from the central bank closed at the end of November but which include a projection for the last month of the year.
It is “a historic high apart from the exceptional production of the year 2021”, a year of catch-up following a year 2020 turned upside down by the Covid-19, indicates the monthly monitoring document on the subject, which also underlines that the creation of housing loans “remains high” compared to the average of the last ten years.
However “the sharp increase in interest rates” has caused a “paradigm shift” which affects the granting of mortgages, said the president of the French Banking Federation Philippe Brassac, interviewed Thursday evening on BFM Business.
The number of real estate loans granted “will drop”, he assured, saying to expect “a 25% drop in real estate loans in production” in the fourth quarter of 2022. The precise figures are not yet available. known, he noted.
Marie-Laure Barut-Etherington, Deputy Director General in the Department of Statistics, Studies and International at the Banque de France, indeed notes a “landing phase in the second part of the year”, less provider of new files.
A finding shared by the Century 21 agency group, which reported on Tuesday a “real slowdown during the summer”. Overall, real estate activity over the year fell by 4.1%, according to the agency network.
Ms. Barut-Etherington, however, said at a press conference that “the supply of credit remained abundant and cheaper than with our main European partners”.
The central bank is also counting on an average credit rate (excluding insurance and ancillary costs) at 2.04% in December, above 2% for the first time since April 2016, following a very rapid increase in recent months.
The bill for the borrower increases accordingly. For example, when the rate of a loan of 150,000 euros over 20 years goes from 1% to 2%, the amount to be repaid in fine goes from around 165,500 euros to more than 182,000 euros, i.e. some 16,500 additional euros .
Some households will not be able to afford it and “it will be less easy to finance mortgages than in 2018, 2019 or 2020”, concluded Mr. Brassac.
Ms Barut-Etherington ruled out any blockage in the property market due to the usury rate, a cap rate intended to protect borrowers from abusive credit conditions.
This legal maximum, raised on January 1 to 3.57% all costs included for a loan of 20 years or more, is under fire from critics, in particular brokers who see it as a barrier to access to mortgages.
Several professional associations also called on Wednesday for “unblocking access to credit” in an open letter addressed to the Minister Delegate for Housing Olivier Klein.
The number of compromises canceled on the grounds of loan refusal is “far less important than what some market operators have been able to declare, whose alarmist communication has undoubtedly contributed to slowing down real estate projects even more than the tightening of borrowing conditions “, observed Tuesday the president of Century 21 Charles Marinakis.
More prosaically, a higher rate allows brokers to better defend their commissions, the banks’ adjustment variable when the room for maneuver between the nominal rate and the usury rate tightens.
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