Loan numbers plunged, pushing the most modest ones out of the market

Slowly however absolutely, the mortgage market has been deteriorating for months. According to figures from the Credit Logement/CSA Observatory, dwelling buy credit score manufacturing declined additional in the second quarter, reversing the pattern noticed in the first quarter. On a year-over-year foundation, the quantity of loans issued fell 12.5% ​​between April and June, whereas the quantity of loans declined 9%.

In the half-year, the decline in manufacturing reached 5.6% in worth and seven.3% in quantity, with the market of outdated buildings affected greater than the market of new buildings. Another remark: the solvency index, calculated by Credit Logement, a banking agency that manages half of the mortgage mortgage collateral, exhibits indicators of weak point; The improve in the common down cost solely partially offsets the improve in the common quantity of a mortgage (+8% in the first half) at an extra excessive value.

However, the Prudential Supervisory and Resolution Authority (ACPR) has simply famous that the danger is effectively managed, because of a grant coverage primarily based on family solvency (and never on asset worth) and disbursements in most circumstances over a set interval of time. charge (and secured by insurance coverage and surety).

An accelerated contraction in manufacturing

“We have a market that has reached collapse mode.”, summarizes economist Michel Mouillert, college professor and scientific advisor to the Observatory. And the outlook for the second half is hardly encouraging, in keeping with Credit Logement. According to the Banque de France’s financial outlook final June, which forecast a mean credit score charge of 1.55% in 2022 (ie 1.9% common charge at the finish of the 12 months), credit score manufacturing (acquired provide) may fall by 15% to 170 billion euros this 12 months in comparison with 200 billion euros in 2021. Euro, ie return to manufacturing ranges of 2018 and 2020.

“It can be straightforward to attribute the decline in manufacturing to rising mortgage charges. But, let’s watch out as a result of the charge has lastly gone up limply Regarding inflation or improve in OAT charge, warns Michel Moulart. According to the Observatory, the common charge (excluding insurance coverage) stood at 1.4% in the second quarter, towards 1.12% in the earlier quarter. In June, this common charge reached 1.52%, confirming an acceleration that has been ongoing since final March. This improve is anxious in a comparatively uniform method for every type of prospects, and for all credit score tenures.

This common charge may attain 1.9% at the finish of the 12 months or 2.25% in a tricky back-to-school situation adjusted for inflation. Note that mortgage brokers are providing even increased charges of over 2% in July! A financial institution now presents a single charge regardless of the borrower’s profile, his revenue or the mortgage tenure: 2.10% over 15, 20 or 25 years! », As an instance dealer studies VousFinancer.

Margins are collapsing

Since final December, the common charge has risen 42 foundation factors, in keeping with Credit Logment, however that is 4 occasions decrease than inflation, and 5 occasions decrease than the ten-year OAT, which serves as a benchmark for actual property credit score. “This improve in charges is definitely speedy however it isn’t with the brutality of the improve that one may count on once you take a look at inflation or market charges,” he mentioned. Note Michel Moulart. Apparently, banks haven’t utterly handed on the market charge hike, and “We’ve by no means seen lending charges so low with inflation.”, the economist underlined. In reality, actual property credit score nonetheless displays unfavorable actual rates of interest.

This has even develop into a trigger of concern for the ACPR, which has at all times been eager to keep away from unprofitable banking actions. Because, for now, banks are clearly promoting mortgages at a loss. French banks’ margins even turned unfavorable by 67 foundation factors in the second quarter, once they have been already in the crimson (-25 foundation factors), in keeping with the European Central Bank’s (ECB) quarterly survey. First trimester.

This is even an exception in Europe the place the common margin on actual property loans in the euro zone has been steady from one quarter to the subsequent (-10 foundation factors all the similar, towards -9 foundation factors in the first quarter), which testifies to a better improve in non-French European banks’ capability to refinance prices. Support. The existence of comparatively low rates of interest (together with insurance coverage and administration charges) in France – which rose to 2.57% for loans over 20 years on 1 July, from 2.4% beforehand – little question partially explains this restraint on the half of the financial institution.

At the similar time, mortgage maturities proceed to extend, with loans over 25 years even representing greater than half of manufacturing (51% and 65% for loans over 20 years). In June, the common time period of a mortgage now spanned 240 months (20 years), in order that the size of the time period virtually totally compensated for the improve in rates of interest. This can be a consequence of the suggestions of the High Council for Financial Stability (HCSF), which units the most rate of interest for a family to borrow at 35% (with out concessions for first-time patrons).

Exclusion of half of the buyer from the market

According to Michel Mouillert, the decline in manufacturing finds one other rationalization. “Production is falling as a result of households can now not entry the market.”, she believes. Indeed, the nature of the market has modified radically. “Clients presenting themselves in right now’s market earn extra”Expert notes.

According to the observatory, common incomes elevated by 4.7% between 2021 and 2022, a far better improve than buying energy. At the similar time, debtors make bigger actual property transactions, which explains the almost 10% improve in the common quantity of loans. “Rarely have we seen such an evolution.”Michel Mouillart emphasised.

With actual property costs that aren’t weakening (but), bought surfaces which might be growing, and above all, a private contribution that’s “by no means earlier than” – about 17% from one 12 months to the subsequent, that is really an upswing. In the actual property credit score market that at the moment favors the most privileged purchasers.

On the half of brokers, it’s rates of interest, which shall be very low in periods of rising charges, which might be put ahead to clarify the rejection of the most modest prospects. This is undoubtedly an remark to qualify as a result of banks at all times wish to protect their prospects by enjoying on different levers of efficient charges, similar to insurance coverage… or commissions paid to intermediaries. Several networks similar to Société Générale have additionally suspended their business relationships with brokers.

The Banque de France survives and marks

The query of excluding low-income households from the market has been strongly rejected by the Bank de France, which places ahead its personal figures to justify each the HCSF’s restrictions and its determination to not change, final June, the mode calculation put on charge. At the starting of July, the Banque de France thus underlined the progress charge of mortgage manufacturing of 6.8% to 27 billion euros in May, ie. “reached the highest degree in the final 5 years”.

Pierre Chapon, founder of the on-line dealer Preto, has an evidence for this obvious distinction between the Banque de la France figures and the Credit Logement figures, and extra, an understanding of the subject. “The Banque de France figures correspond to the precise launch of funds from a mortgage that might have been granted three or 4 months earlier, and due to this fact in utterly completely different market circumstances.”, this skilled rationalization. And for that, the attrition charge cap will truly be in full impact from subsequent September, in keeping with official figures. The charge of put on is definitely calculated, each quarter, on the common charge of recorded loans in comparison with the earlier quarter, elevated by one third. So a major lag impact when the charge climbs quicker and quicker each month.

Limitations of hCSF additionally play their half on this discount in manufacturing. These have develop into necessary for banks from January 1. However, in keeping with the ACPR, round 15% of mortgage manufacturing at the finish of December 2021 didn’t adjust to the HCSF norms (in comparison with 23.8% at the starting of 2021). 15% of manufacturing that should now comply, or be withdrawn from the market.

“Production is reducing as a result of, maybe, banks at the moment are respecting these suggestions, which reduces the risk of getting into the market for some segments of purchasers, particularly these with the lowest private contribution”, suggests Michel Mouillart. With the mixture of all these elements (charges, HCSF, attrition charges, excessive actual property costs, and so on.), low-income shoppers now not have a spot in the mortgage market.

A credit score skilled is much more terrifying: “Bank de France needs to interrupt the market, particularly to decrease costs in huge cities”. A judgment of intent that has additionally begun to significantly annoy the governor of the Banque de France, François Villeroy de Galhau.