Real estate credit: towards a status quo during the summer

The beginning of June was marked by two major events:

• The reduction in key rates decided by the ECB on June 6, in reality already anticipated by the markets, which had only a limited impact on interest rates;
• The entry into a period of uncertainty following the announcement of the dissolution on June 9, which immediately resulted in an increase in State financing costs followed by the banks which use the OAT 10 years as a benchmark for setting their rates.

Pending a clear direction in terms of economic policy, which should probably not be known before the formation of a new government and the end of a potential “Olympic truce”, the banks are adopting this month -here a wait-and-see attitude characterized by a strong majority of stable grids and a few slight drops.

Given their impact on sovereign rates, the outcome of the legislative elections will be key to defining the outlook for real estate credit between now and the end of the year. Without forgetting that if the overall direction is still given by the ECB, which should continue its strategy of lowering rates, the national context could for its part lead to a decorrelation between the trajectory of rates in France and that of the rest of the Euro zone.

Evolution of borrowing capacity for a salary of €4.000 gross monthly (€48.000/year)

For Pierre Chapon, president of Pretto: “Summer is usually a period of status quo for rate changes, it will be reinforced this year by the political context. Opportunities to make good deals, however, still exist in the real estate market with rates which have fallen by almost a point since the second half of 2023.”

Illustrative image of the article via Depositphotos.com.