2023-09-25 18:31:20
It is a decision which risks disappointing many real estate players, and in particular brokers: the authorities refused on Tuesday September 26 to relax the rules governing real estate credit despite the fall in activity, arguing that Existing flexibilities were not fully used by banks.
Currently, to combat over-indebtedness, banks are not allowed to lend money if monthly payments exceed 35% of income, nor for a period exceeding twenty-five years. They can deviate from these criteria in 20% of cases, provided that this primarily concerns main residences and targets, in almost a third of cases, first-time buyers.
However, the High Financial Stability Council (HCSF), which brings together, among others, the Ministry of the Economy and the Banque de France, notes that “all establishments are not making full use of the flexibilities that it provided and relaxed at its June meeting”according to the press release published at the end of the meeting held this Tuesday.
Interest rates rising sharply since December 2021
It notes that banking establishments only deviate from the rules in 13.8% of cases, and that exemptions excluding the purchase of a main residence, which can only represent 6% of the total credits granted, compared to 4% before June, amount to only 2.4% of the total. “Banks therefore have room to further increase their credit offering, while respecting (the criteria currently in force) »adds the HCSF, which meets every quarter.
According to a source close to the body, the prevailing feeling today is that the fall in activity in the real estate sector is explained above all by the fact “that the market is adjusting to the new interest rate conditions”increased on average from 1.06% in December 2021 to 3.63% in August 2023, and not by the rules introduced in 2019 and revised several times since.
“Overall, the HCSF rules do not currently constitute the strongest constraint on credit, except perhaps in certain sectors and certain geographies”abounds in an interview with Echoes Tuesday evening Nicolas Namias, president of the French Banking Federation (FBF).
“An incomprehensible decision” for representatives of the sector
For months, banks, brokers and players in the real estate sector have been fighting more or less head-on against these rules, in a context of falling number of transactions, and pointing the finger at the Banque de France, Governor François Villeroy de Galhau being one of the main advocates of maintaining the existing rules.
Several presidents of Assembly committees as well as the general budget rapporteur Jean-René Cazeneuve recently increased the pressure by pleading, in a letter addressed to Bercy, to loosen the constraints. According to MP Sacha Houlié (Renaissance), interviewed on Franceinfo on Sunday, Bruno Le Maire said “study this hypothesis”.
After a post-Covid buying frenzy and a record 2021, the volume of real estate transactions has fallen sharply.
In July, 10.1 billion euros of real estate loans, excluding renegotiation, were granted, the lowest since April 2016 and almost half as much as in July 2022, according to the Banque de France. As for reservations for new housing with developers, they fell by almost 40% year-on-year in the second quarter, to 18,000.
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