Real estate loans pick up again in April, according to the Banque de France

The total amount of new housing loans, excluding renegotiations, reached 8,9 billion euros, up almost 30% compared to that of March, of 6,9 billion euros.

“This is the first significant trend reversal since the spring of 2022 and the rise in rates. According to several leading indicators, this reversal should continue in May,” the Bank of France indicated Thursday in a press release.

Real estate loans in France have experienced a steep fall since the start of 2022, linked to the gradual increase in interest rates after years of decline. An overall decrease interrupted only by a few bursts of increase like in January 2023.

The average interest rate on new loans continued to decline: it stood at 3,89% in April, a decline of 0,28 percentage points compared to January.

Banking establishments are "trying (...) to revitalize the real estate loan market", analysts from the CSA/Crédit Logement Observatory, another data provider on this market, indicated on Tuesday. According to them, the average credit rate was 3,73% in May.

The cost of credit, significant for loan candidates even with the start of a drop in rates, weighs on the real estate purchasing power of households. But the main obstacle remains a still high property price.

Illustrative image of the article via Depositphotos.com.