Congratulations! Real estate being vastly overvalued, no one has to buy anymore, so that prices return to a normal and logical level. Anyway, that's what I'm waiting for...; ))))
Never in more than 25 years have banks seen the number of their customers with a loan to repay fall so low.
Never, since the FBF (French Banking Federation) and the polling institute TNS measure this figure, that is to say since 1989, the French had held so little credit. 47,6% of them, ie approximately 13 million households, declare that they have repaid one or more loans, all types of loans combined. Those who continue or begin to pay monthly mortgage payments are even fewer: 8,5 million.
Where have these credit holders gone? Nowhere, answer the bankers of the Banking Federation: they have either repaid their current loan, or given up taking out another one. The phenomenon is general and also affects consumer loans: more than two million users of "small loans" - themselves often real estate borrowers - have disappeared from this market since 2007. The implementation of the Lagarde law, which has slowed down the ardor of consumer credit establishments, no doubt has a lot to do with it, and that's very good... But households have also been very sensitive to the economic situation and job prospects.
Half a million fewer potential owners
It is these two concerns that also explain the reluctance of households to take out a mortgage. More surprisingly, only 4,5% of households are now ready to go into debt in the next six months to buy a home. They were between 5,8 and 6% between 2005 and 2007. However, as more than 80% of home purchases are made through credit, this drop in appetite for credit has a direct impact on the market .
And, in fact, the intentions of the French correspond well to what they have done: since 2007, the date when their intentions to take out a mortgage collapsed, sales of real estate have generally been in decline. Let's be even more precise: the increase from 6 to 4,5% of "credit intentions", measured by the FBF, is equivalent to the loss of 400.000 potential transactions.
This figure corresponds to what experts have observed in recent years: between 400 and 500.000 potential buyers have indeed disappeared from the market. This explains the current depression in the market: a certain number of potential sales have indeed disappeared each year since 2007. Between 30.000 and 40.000 per year in new buildings and around 50.000 per year in old ones…
And the latest news, the real estate morale of households has not improved: they do not intend to start buying again, since they do not plan to go into debt in the next six months. The good news - because there is one, all the same - is that with this depression on demand, loan rates are not about to increase again. THE banks, which still have plenty of room for manoeuvre, could revive competition on rates to attract these borrowers, who are decidedly fewer and fewer…
Source (s): Challenges.fr via Master Confucius
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