French banks slightly raised interest rates on mortgage loans to individuals on average in November, but their level remains close to their historic low and below inflation, according to a study released Monday.
All durations combined, lending rates in the competitive sector reached 1.44% in November, a small increase after several months of stagnation, reports in a statement the Credit Housing. The first organization gathers as shareholders the main French banks, the second is a market research institute.
“The rates of real estate loans which were stable since last June therefore rise, slightly still, ” sums up the observatory. Rates fell steadily in the first half of 2018, approaching their bottom hit in 2016 just over 1.30%, then have changed little since the start of the year. Summer.
Still negative real rates
At the same time, while the rate of inflation is still accelerating, interest rates have been negative for 6 months, confirming a situation unprecedented since 1974, emphasizes the observatory. The rise in prices in fact slowed down somewhat in France in November to 1.9%, but, after a sharp acceleration this summer, it remains significantly higher than the average rate real estate loans.
Theoretically, this amounts to saying that it is possible to gain purchasing power by going into debt for a property purchase. Nevertheless, the observatory’s figures are understood to be gross and do not, for example, include loan insurance, systematically requested by the creditor body.
No increase in demand
Like the previous months, the observatory also stresses that these advantageous credit conditions are no longer enough to drive demand up. He held them responsible for the rise in property prices and the deterioration of public support, the government having reduced the geographic scope of several aid to property.
In detail, the average rates were established last month at 1.50% for new home buyers and 1.46% in the old one, in both cases increases compared to October. On the other hand, their level drops with regard to works. The average duration of real estate loans resumed its progression after a break the previous month: in November, it stood at 227 months against 225 in October.