According to the Home Loan Observatory/CSA, after several years of large declines, loan rates are on the rise, reaching an average of 1.22% in mid-April, or +0.16 points compared to December 2021.
Real estate experts expect this upward trend to continue. “We are certainly entering a period that risks being complicated for buyers,” says Virginie Brochier, manager of Cafpi real estate loan brokerage in Bourgoin-Jallieu.
Especially since the rise in interest rates coupled with new rules on debt rates and loan terms created by the Supreme Council for Financial Stability (HCSF). As a matter of fact, limiting the term of loans to 25 years since the beginning of the year and limiting the maximum indebtedness rate (including insurance) to 35% restricts some buyers.
It’s a new deal in the real estate market that’s really used to not having to deal with borders. Even as these harsher conditions begin to take effect, housing market players are not seeing any real change in the main trends observed in recent years. “We have no real warnings, the market in general continues to be the same,” says Franck Dubessy, manager of the Laforêt estate office in Bourgoin-Jallieu.
“We are in more favorable terms than in 2019 and 2020, even as rates rise,” adds Charles Derycke, director of the Meilleurtaux brokerage firm in Bourgoin-Jallieu.
Some hurry, some wait
Real estate professionals are starting to detect some weak signals that suggest changes. “Buyers who are already on the road tend to expedite their purchasing plans as they expect a permanent increase in rates,” says Franck Dubessy.
Until then, if they’ve taken the time to search, compare, or even uncover the rarest pearl, in recent weeks they seem ready to sign a proof of purchase as soon as possible, even if it means making some concessions on location or quality. your good.
For other buyers, this has the opposite effect. “Some clients consult us so we can run new simulations in their files. “They are afraid of having to give up their project, change it, or arbitrate between the various loans they have,” says Virginie Brochier of Cafpi, in order to finance the purchase of a property.
For the time being, though, the actors of the financing, such as those of the transaction, do not see the rejections flowing in. “Overall, we don’t have too much to worry about financing a prime residence,” sums up Charles Derycke of Meilleurtaux. “Even if we note the tightening of credit conditions, we have files with good personal contributions that have achieved rates of 0.85% in 15 years,” says Antoine Bonardot, director of the L’Immobilier d’Anthony agency in Vienna.
Concerns and questions
Obviously, the most restricted files are the first to bear the brunt of the change in credit terms. First, those with low contributions, including first-time buyers who are already struggling to own it. “It gets really complicated for them,” said Franck Dubessy.
On the investor’s side, the tightening of borrowing conditions makes the profitability equation more sensitive. “Beyond rising interest rates, investors also find that their files are dismissed when the debt ratio is no longer respected, whereas in recent years, if the rest has been good, the files have been financed without a hitch,” explains Charles Derycke.
The results can be felt more in the new market and small surfaces, which is a favorite target of investors, here again even if real estate agents do not see a market reversal in the short term.
Loan rates still attractive
Most banks, national or regional, increased their loan rates by 0.05 percentage points in April to 0.45 points for one of them, according to real estate loan broker Vousfinancer.
As a result of the 10-year government bond yield, which was 0% at the end of December 2021, rose above 1% at the beginning of April, that is, returning to the level of April 2017.
On average, loan rates now reach 1.25% at 15 years, 1.45% at 20 years and 1.65% at 25 years.
For the best profiles, with a good contribution, these rates increase to 0.90% at 15 years, 1% at 20 years and 1.25% at 25 years.
“Banks are trying to limit interest rate hikes as much as possible or make them as gradual as possible, for some by sending out new scales every 15 days. However, in this context, the movement is likely to continue in the coming weeks,” said Sandrine Allonier, director of studies at Vousfinancer.