After massive multi-year declines, credit rates rose to an average of 1.22% in mid-April, +0.16 points compared to December 2021, according to the Housing Credit Monitor/CSA.
Real estate professionals expect this upward trend to continue. “We are definitely entering a period of complex risk for buyers,” predicts Virginie Brucher, director of Cafpi mortgage brokerage at Burgoyne Gallio.
Especially since higher interest rates are exacerbated by the new rules on debt ratios and credit terms, established by the High Council for Financial Stability (HCSF). Indeed, since the beginning of the year, limiting the term of loans to 25 years and the maximum leverage ratio to 35% (inclusive of insurance) has constrained some buyers.
A new deal in the real estate market that is used to not really having to deal with borders. Even if these harsher conditions begin to have their effects, players in the housing market do not notice any real changes in the main trends observed in recent years. “We don’t have any real alert, the market in general is still working as well,” says Frank Dubissy, director of the Laforêt real estate agency in Bourgoin-Jallieu.
“Even if rates are going up, we still have better terms than those of 2019 and 2020,” adds Charles Derek, director of Meilleurtaux brokerage at Bourgoin-Jallieu.
Some hurry, others wait
Real estate professionals are beginning to recognize some faint signs of changes. “Acquires who are already well on their way tend to want to speed up their buying plan, because they expect a permanent price hike,” comments Frank Dubissy.
If until then, they’ve spent time researching, comparing and even discovering the rare pearl, in recent weeks they seem ready to sign the deed of purchase as soon as possible, even if it means making some compromises on location or quality of good.
For other acquirers, this has the opposite effect. “Some clients are consulting with us so we can run new simulations on their files. They are afraid of having to abandon their project, of having to modify it or of having to arbitrate between the various loans they have in order to be able to finance a property purchase,” says Virginie Broscher. from Caffeby.
However, for now, finance players like those involved in the deal don’t see the rejections flowing. “In general, in terms of the financing of a major condo, we don’t have many concerns,” summarizes Charles Derek of Meilleurtaux. “Even if we notice a tightening in credit conditions, we still have files with good personal contributions that get rates of 0.85% over 15 years,” explains Antoine Bonardot, director of L’Immobilier d’Anthony in Vienna.
Concerns and questions
It is clear that 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 were already struggling to become owners. “It gets too complicated for them,” Frank Dobicy said.
On the investor side, the tightening of borrowing terms makes the profitability equation more accurate. “Apart from the increased interest rates, investors now also see their file rejected when the debt ratio is not respected, whereas in recent years, if the rest is to live well, the files have been funded without any problem,” explains Charles Derek.
The consequences can be felt more for the new market and smaller surfaces, preferred targets for investors, even if the real estate agents here never again see a short-term market reversal.
Credit rates are still attractive
According to mortgage broker Vousfinancer, most banks, national or regional, raised their credit rates in April by 0.05 to 0.45 points for one.
As a result of the sudden rise in the price of 10-year government bonds, which rose from 0% at the end of December 2021 to more than 1% at the beginning of April, that is, back to its level in April 2017.
On average, credit rates are now at 1.25% over 15 years, 1.45% over 20 years, and 1.65% over 25 years.
For the best profiles, with a good contribution, these rates also rise to about 0.90% over 15 years, 1% over 20 years, and 1.25% over 25 years.
Banks are trying as much as possible to limit the rate hike or make it as gradual as possible, by sending out new schedules every 15 days for some. However, in this context, the movement is likely to continue in the coming weeks, analyzes Sandrine Allonier, Director of Studies at Vousfinancer.