In 2023, there have never been so few real estate loans issued in 8 years

In 2023, the granting of new real estate loans reached 129.5 billion euros.

New real estate lending reached its lowest level in 2023 at 129.5 billion euros, even as interest rates have begun to stabilise, the Bank of France said on Friday. We have to go back to 2015, the year when interest rates were lower, to get a number housing loans a smaller amount is given to private residents, at 120,000 million euros.

The Bank of France, however, observed a slowdown in the average interest rate on these loans, which barely rose in December (4.04%, after 3.99% in November), and stated that “some of our European neighbors have already begun to decline”.

La place de l'immo: real estate credit, finally some good news?  - 09/11
La place de l’immo: real estate credit, finally some good news? – 09/11

Despite the stagnant rate, housing loan production continued to decline in December to reach 8.2 billion euros per month, the lowest since December 2014. Rising interest rates and the reluctance of banks to grant new loans, while wages are increasing little and in real terms. Real estate prices have fallen slightly, contributing to the drop in demand.

Families with less tendency to borrow

The result has triggered the real estate loan market, after prosperous months of over 20 billion euros per month, in October 2020, May, June and July 2021 or even April and May 2022, driven by a catch-up effect after the periods. before the lockdown and the announced increase for borrowers to still take advantage of attractive rates in 2022.

Since then, households have become less inclined to borrow, as a result of the European Central Bank’s (ECB) increase in key rates from mid-2022, as reported by banks. Although the average rate remained below 1.1% until March 2022, it has not fallen below 2.5% for a year. The total amount of real estate loans, however, remains significant at almost 1.3 billion euros, twice as much as fifteen years ago. The French have an average of 23 years of debt when they buy their main residence, and first-time buyers – who represent half of borrowers – have seven months more, according to the Banque de France.

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