2017 will be considered a very good year in the real estate sector. Note that the volumes recorded between January 1 and August 31 go straight to a new record in the number of home loans. Note that the overall amount could approach 260 billion euros. Increase in housing starts, rental investments … How is this progression justified?
How to explain this increase?
This extraordinary dynamics of the mortgage market is explained by attractive financing conditions relating to particularly reduced borrowing rates . Indeed, the latter have reached very low levels thanks to the measures taken by the Capital Lender in order to revive the economic situation of the European Union. That is, the institution agrees to lend money to second-tier banks at a lower cost.
There is no denying the positive effects generated by this approach. Indeed, according to the latest figures published by the Banque de France, the total amount of financing dedicated to real estate has increased by 6% over one year to reach 935 billion euros at the end of summer 2017.
At the same time, these figures show that the cumulative production of new credits increased by 50% over one year to reach almost 210 billion euros in the middle of the year. In addition, given the current pace, some specialists maintain that the total amount of new financing should be around 260 billion euros for the year 2017. The record for 2016 will be beaten since it was set at 250 billion euros.
How to explain this slowdown?
Nevertheless, despite this exceptional production, the statistical data show that the trend is slowly reversing . If we stop at the month of August, this downward trend in scales was effective for both renegotiated loans ( halved between spring and August) and for new loans (drop of 13.8 billion d euros in July to 10.7 billion euros in August). This is due to several new factors.
On the one hand, the change of government and the planned measures slowed down this demand for credit from individuals. Indeed, the uncertainty with regard to the new tax standards to come has dissuaded certain individuals in their approach to real estate investment . Not to mention the gradual increase in property prices in certain cities in France such as Lille and Montpellier.
All the eyes of specialists are on 2018. Should we expect an end to the euphoria in the real estate sector? Indeed, borrowing rates are stagnating and the contracts that had to be renegotiated are already.
Our advice: anticipate the changes planned for the coming new year. Do you want to invest in real estate? Take advantage of expert advice in setting up this investment. Complete our form to be contacted by one of our specialist advisers.