2023-10-18 13:00:57
“The upper middle class is now eligible”
The main change to the zero-interest loan (PTZ) lies in the extension of its eligibility to a wider range of the population. Indeed, according to the declarations of the Minister of the Economy, during his appearance on RTL this Wednesday, October 13, 2023, the planned improvements will allow the “ upper middle class » to benefit from the PTZ. To do this, the government introduced a new income ceiling into the 2024 finance bill. “ We increased the scales of the first 3 tranches, the most supported, and we added a 4th (…) the upper middle class is now eligible », specified Bruno Le Maire. Concretely, the income ceiling for a person living alone increases from 49,000 euros to 74,000 euros. Other good news for people eligible for the zero-interest loan: the maximum amount of the PTZ has been increased by 20,000 euros, which raises it to 100,000 euros. Support by the State – the taxpayer – has also been reassessed to 50% (compared to 40% currently) for households (a couple and a child) who earn less than 45,000 euros per year.. According to Bruno Le Maire’s estimates, widening the accessibility conditions of the PTZ would cost around 850 million euros to the State – taxpayer.
In order to support all of these measures, and to revive the real estate market in areas under tension, the Minister of the Economy announced that 210 additional cities (in addition to the 154 recently announced) will be eligible for the zero-interest loan. Last announcement from Bruno Le Maire, and not the least, the zero-rate loan might be extended until 2027. The interview with the Minister of the Economy seems full of great promises, so much so that one might wonder if Bruno Le Maire is not selling the bear’s skin a little before having killed it…
New PTZ: false good news?
Indeed, although the government has taken significant steps to make the PTZ more accessible, all eyes remain on the banks. With interest rates still high (5.8%), banks are struggling to find their margins. As a result, they are still reluctant to grant real estate loans. Proof of this is: their numbers fell by almost 50% during the period July 2022 to 2023. PTZs are no exception; following a drop of 17% in 2021, the number of zero-rate loans recorded a further drop of 26% in 2022 (only 63,000 PTZ were granted for an average amount which did not exceed 52,000 euros). The announcements from the Minister of the Economy seem far from market reality; they are just window dressing.
Another important element to note: the real estate crisis has drastically slowed down the construction of new housing. According to March 2023 figures from the Federation of Real Estate Developers (FPI), the number of new homes put up for sale was below 100,000, and the number of sales of individual homes recorded a drop of 31% during 2022. According to declarations of the president of the FPI, Pascal Boulanger, with our colleagues from the JDD, 450,000 new homes would need to be built per year to meet the demand for housing. Bruno Le Maire’s announcements therefore seem to fall well short of the challenges posed by the real estate crisis. And if we are to believe the latest figures mentioned, this will not be resolved for a while. The French real estate market seems to be mired in a real impasse…
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