4 Indicators of a More Liberal Market

Resume credit requests

The recent period is a sign of renewal for property loan applicants. In February 2024, more than 30,000 applications were submitted, a 70% increase compared to December 2023, when the rate peaked.. This resumption of financing requests reflects renewed optimism among the French, although the volume of files is 35% lower than in March 2023.

MP Lionel Cosey’s initiative, aimed at liberalizing borrowing capacity for wealthy households, reinforces this momentum. By allowing banks to exceed the current debt ceiling, the proposed legislation could further stimulate the market by attracting a new class of borrowers.

More attractive credit terms

Banking sector shows decline in mortgage rates. In March, most bank schedules offered rates below 4.30% over 20 years, with a third below 4.10%. This reduction in rates logically leads to a reduction in the cost of credit, with a striking example: a loan of 200,000 euros over 20 years now costs 13,000 euros less in interest than in November..

This reduction in interest increases the borrowing capacity of households. Thus, a family with a net income of 4,000 euros sees its borrowing capacity increase by 9,000 euros in just four months, potentially allowing it to acquire additional square meters in its real estate project. For higher incomes, the benefit can reach 15,000 euros.

Towards a more inclusive real estate market

The norm limiting the debt ratio to 35% of net income before tax, though it excluded many potential buyers, seems to be having less impact. Since the end of last year, the share of files respecting this status has increased by 11 points, reaching 68%.. This development indicates that the market is gradually becoming more accessible to borrowers.

At the same time, the proportion of files deemed unfundable is declining, down from 11% in December to just 8%. This indicates greater openness of banks towards loan applicants, possibly due to increased competition to attract new customers.