The real estate loan broker Meilleurtaux expects a significant drop in housing transactions next year with a market that should refocus on forced sales, i.e. sales motivated by changes in personal circumstances (divorce, transfer, moving away) or successions. For the rest, the difficulties in accessing mortgages should further reduce the proportion of first-time buyers, while borrowing rates are expected to continue to rise in the coming months.
As for second-time buyers who have strongly driven the real estate market over the past two years, they should also be much less present because they can no longer take advantage of very attractive credit conditions, as was still the case until spring 2022. . ” Many second-time buyers who have borrowed around 1% will prefer to stay warm and postpone their moving plans », Analyzes Maël Bernier, spokesperson for Meilleurtaux.
We are heading towards rates at 3% over 20 years
Because today we are far from the 1% in force until the end of 2021, or even the beginning of 2022 for the best borrower profiles. Since early October, more than 7 out of 10 scales offered by banks have been between 2.30% and 2.90% over 20 years, according to the latest Meilleurtaux observatory. In other words, barely a quarter of the scales are below 2.30% over 20 years. ” We are clearly heading towards rates at 3%, a level which will probably be exceeded in the first half of 2023 “says Maël Bernier.
At these levels, many borrowers are mechanically no longer financeable since they exceed the maximum debt ratio of 35% imposed by the banks (with a small margin of flexibility). Until now, it is even a form of buyer self-censorship that has been observed by the broker, resulting in a sharp drop in requests for financing since June 2022, from the moment when the rates accelerated their recovery.
Solvability effect of the rise in interest rates
At Meilleurtaux, the proportion of financeable files with a debt ratio of less than 35% has already fallen to 58% today against nearly 70% a year ago. At the same time, nearly 30% of cases no longer have any chance of being financed because these borrowers have a debt ratio above 40%. This debt ratio, which corresponds to the ratio between the monthly repayment (insurance included) and income, remains closely monitored by the regulatory authorities, as the Banque de France has just reminded us a few days ago in its review of financial stability risks. The only way to reduce this debt ratio remains to mobilize more personal contribution, which is of course not always possible, or to extend the duration of the loan knowing that we are capped at 25 years in the old one.
A reduced banking offer
At the same time as this desolvability impact of the rise in interest rates, the banking offer has been significantly reduced in recent months because some establishments no longer lend or only to their best customers. These are mainly the banks most dependent on refinancing on the financial markets where the yield on 10-year OATs (around 2.8%) currently exceeds nominal rates, an anomaly which today makes the profitability of mortgage loans very risky for the banks, France remaining in passing one of the few countries to offer fixed rates over the entire duration of the loans.
And then there is also the obstacle of wear and tear thresholds. ” We find ourselves in the same situation as this summer in terms of usury rates: with rates above 2.30%, we are no longer able to bring borrower insurance into the maximum APR of 3.05% “Summarizes Maël Bernier. The situation will not improve before January 1, the date of the next revision of the wear and tear thresholds for the first quarter of 2023.
A limited impact on prices?
It now remains to be seen to what extent and in what time frame this slowdown in transactions may influence the prices of old real estate. Maël Bernier expects a limited and delayed impact on prices and does not believe in a collapse in 2023 as there should be no disruption between supply and demand. The fall in demand would indeed be accompanied by a reduction in supply with the withdrawal of many second-time buyers.
It would therefore rather be a phase of price moderation which is looming as we are already seeing in the most expensive cities such as Paris, Lyon or Bordeaux. Everything will then depend on the evolution of inflation from the second half of 2023 because it is this data that directly influences key rates and therefore access to credit for households. The opportunity to recall that even in 2014 when the rates over 20 years were on average at 3%, more than 700,000 transactions had been carried out compared to the exceptional level of just over 1 million from 2019 to 2021.