Real Estate: Borrowers rush to credit before conditions tighten

Last call before the doors close. During the second quarter, large numbers of households rushed to their broker or banker to get a mortgage, fearing that rising loan rates would make their projects much more difficult to finance in the future.

Loan growth, more than 6.5% in recent months according to data from the Banque de France, returned to record levels observed just before the health crisis, in the autumn of 2019.

“The French rushed to bank branches to finalize their loans, well aware that rates would rise,” said Philippe Heim, chairman of the board of La Banque Postale recently, but expects a slowdown in the second part. of the year.

For the moment, this rush can be seen in all French banks, which have just released their results: their retail banking activities have quite sustained performance and mortgage lending has generally progressed at a large V.

LCL and Crédit Mutuel at the forefront

Within the Crédit Agricole group, the 39 regional banks saw their home loan stocks jump 5.9% to € 372.8 billion. In LCL (a subsidiary of Crédit Agricole), the momentum is particularly strong, as over the same period stocks increased by 9.2% to € 96 billion.

In a market dominated by mutual networks, the Crédit Mutuel Alliance Fédérale (CMAF, main member of the Crédit Mutuel group) has signed a “historic” semester, welcoming its president, Nicolas Théry. The bank recorded 9.5% growth in its outstanding loans to € 248 billion. The phenomenon is also very marked in La Banque Postale. The La Poste subsidiary not only saw its debts grow in the first half by 5.5% (to 65.7 billion euros), but it also gained ground, as its production of new loans increased by … 21%. times faster than the market average.

The two major commercial banks, BNP Paribas and Société Générale, have smaller market shares, but target more affluent borrowers on average: the former saw its mortgage lending in France increase by 5.9% to 98.6 billion. euro dirham at the end of June. As for the second, the increase in loans is only 4% for its France and private banking networks, but explodes by 27% – certainly on much lower volumes – in its subsidiary Boursorama.

Landing has begun

Will the rest of the year be more difficult for both banks and borrowers? Some banks are already proposing it, highlighting in particular the famous “usury rate”, the maximum rate at which it is allowed to lend. Although rates have risen rapidly since the beginning of the year, usury rates would be too slow to adjust, making lending impossible in some cases. A risk regularly thwarted by brokers, which has not materialized so far.

Yet, according to the most recent data, the normalization of home loans continues. This can be seen primarily in credit rates, which have continued to rise in recent weeks. At the end of June, according to data from the Banque de France, the rate on new loans thus reached 1.34%, while last January it was still 1.1%. The fairly rapid increase brings the cost of credit back to the September 2020 level.

As regards the month of July, the Crédit Logement CSA barometer (with a different method and a less exhaustive scope than the Banque de France) shows a rate of 1.68%. “The increase is faster each month, but remains limited by usury rates over longer periods,” indicates the barometer in its latest publication. However, these rates remain historically low, and above all below inflation, which means that in real terms (the nominal rate from which inflation is subtracted) they are negative. A situation that remains advantageous for families.

Another sign of a soft landing for credit: according to anticipated data from the Banque de France, the production of new loans will be “only” 21.6 billion euros in July. If the figure remains astronomical, it still represents 1.1 billion euros less than in June (-5%) and above all 5.2 billion less than in May.

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