Real estate credit: banks regain balance after two years of negative margin, according to the ACPR

The use of data "to monitor the pricing of real estate credit reveals margins on granting, as declared by establishments, which are negative but which have recovered in 2023", without however returning to the green, write the analysts at the Prudential Control and Resolution Authority (ACPR).

“This recovery continued in the first quarter of 2024 where we observed a return to balanced margins for the first time in 2 years,” continues the ACPR.

At its lowest in the fourth quarter of 2022, the average overall margin, composed of the net margin and ancillary income - administrative fees, insurance contract distribution commissions (borrower insurance, multi-risk home or guarantee insurance), early repayment compensation ... -, familiar with the -1,5%.

This observation may seem counterintuitive for loan applicants who have noticed a significant increase in the cost of credit over the past two years.

At issue: the sharply increasing cost of refinancing banks, as the European Central Bank (ECB) increased its rates to fight inflation, which was not fully passed on to them.

In order not to increase their losses, certain establishments almost withdrew from the market at that time.

In the absence of a greater drop in real estate prices, according to several bankers and brokers, this market is still slowing down.

The total amount of real estate loans excluding renegotiations, at its lowest in March for ten years, started to rise again in April, before already running out of steam in May, according to data published a week ago by the Bank of France.

This study was carried out at the request of the High Financial Stability Council (HCSF) which issues, among other things, the rules governing the granting of real estate loans.

Illustrative image of the article via Depositphotos.com.