Lending conditions are currently particularly favorable. However, this situation is set to change rapidly. Indeed, the Fédération nationale de l'immobilier (FNAIM) expects the real estate market to enter a "turbulent phase", with a net decline in activity towards the end of the year.
Outstanding mortgages soar
According to the Banque de France, outstandings have returned to their pre-health crisis level, with growth of 6.5% in recent months.
This trend can be observed across the board. At Crédit Agricole, outstandings rose by 5.9% to 372.8 billion euros. LCL, a Crédit Agricole subsidiary, experienced even stronger momentum, with a 9.2% increase in outstandings to 96 billion euros. For its part, Crédit Mutuel Alliance Fédérale recorded historic growth to 248 billion euros (+9.5%). La Banque Postale's outstandings rose by a similar 5.5% to 65.7 billion euros in the first half of the year. Finally, despite their smaller market shares, Société Générale and BNP Paribas also saw their outstandings grow, by 4% and 5.9% respectively.
Borrowing conditions remain attractive
These very good results from the banks can be explained by borrowing conditions that are still attractive ahead of a possible rise in mortgage rates. To avoid seeing their plans fall through, many households rushed to take out mortgages in the 2nd quarter.
According to the latest Banque de France figures, loan rates averaged 1.34% at the end of June, compared with 1.1% in January. The trend accelerated in July, with the average rate reaching 1.68%, as shown by the Baromètre Crédit Logement / CSA, whose calculation methods differ from those of the Banque de France. Despite this upward trend, mortgage rates remain very low, and below inflation. Aware that this may not last, the French are taking advantage of these favorable conditions.
An uncertain real estate market
Real estate professionals have differing views on the level of interest rates at the end of the year. While some believe that the faltering economy could revitalize the image of borrowing, the FNAIM expects interest rates to continue rising in the 2nd half of 2022, with an 8% to 10% drop in sales volumes. The Federation expects prices to continue rising at a slower pace than the 7.5% observed in 2021 and inflation.
"In 2022, real estate purchasing power is expected to fall by 4.3%, i.e. a 9.4% drop over 3 years: after the rise in prices, it is suffering from the rise in interest rates", explains Jean-Marc TORROLLION, President of the FNAIM, in a report dated June 28, 2022.
All the evidence suggests that August is the ideal time to borrow.