Credit immo : interest rates in France are the lowest in Europe

You can rejoice ! Side loans and real estate purchases, the French are among the better-off in Europe. Do you realise that between 2008 and 2016, your purchasing power in real estate has increased 30% in average. This is the assessment made by the Credit Foncier in a study published in the may 16, 2017 and bears on the 28 countries of the european Union. This gain in purchasing power is borne by the low rise in real estate prices and also the fall of interest rates on credits immo… In France, these have decreased by 66 % in 8 years. A record ! And a very good new banknote decrypts for you.

Credit real estate Credit real estate : the French are better off than their european neighbours ?

“In all european countries, the decline in rates has been very significant, remember the Credit Foncier. Since 2008, the rate of real estate credit have been divided by two or three depending on the country. “

Interest rates very competitive in France

But all the european citizens have not been impacted in the same way. It is in France that the interest rates have fallen. Between 2008 and 2016, they are passed by an average of 4.8 % to 1.6 % (-66 %). Conversely, in Poland, the borrowing rate declined by only 45 %, from 8.1 % in 2008 to 4.4 % in 2016.

Result, the last year, it is also in France that the individuals have taken advantage of the best rates, as shown in the graph below.

Source : EMF (as cited by the Credit Foncier)

A situation that has nothing exceptional but it remains surprising. Indeed, ” historically France is one of the european countries where the credit interest rate real estate are the lowest. This situation is all the more remarkable that the bulk of the property loans were underwritten in France with a fixed interest rate (96.7% of new loans in 2015), which is not necessarily the case of other european States in which the rates can also be variable or fixed for periods (and therefore necessarily lower than fixed rates), ” says the Credit Foncier.

Relative stagnation of real estate prices in france

At the same time the interest rates fall, the prices of real estate (new and old combined) increased by only 3 % between 2008 and 2016 in France, compared with +7 % on average in Europe. Not bad ! But there’s more. In Spain and Italy, prices decreased by respectively 25 % and 15 %… the countries of southern Europe which have been most affected by the economic crisis.

Therefore, it is also in these two countries that the purchasing power of real estate has increased the most. For the same monthly payment and same term loan, the Spanish were able to acquire 84 % more in 2016 than in 2008. The increase in surface area is 53% in Italy. But the French are not left out. In 8 years, their purchasing power in real estate has increased 30 % in average.

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And the French were able to take advantage of these exceptional conditions !

France is the 9th european country in which individuals are the most indebted. On average, a household French owner is indebted under its credit real estate – 49 870 € at the end of 2016. As A comparison, the european Union, the average amount outstanding is 40 700 €.

But we are not the european champions. The inhabitants of the north of Europe, we are ahead widely. In Denmark, Finland, Ireland, the United Kingdom and Sweden, the owners have a real estate debt 80 164 € on average, nearly double that of France, so…

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And in 2017 ?

The real estate prices begin to rise significantly. An increase which is much felt in cities such as Paris, Nice or Lyon. The rate of real estate lending also will rise again. But, concerning them, they are still at very low levels. According to the Observatoire du Crédit Logement/CSA, the average rate on new housing loans was 1.55 % (excluding insurance) in April 2017, as against 1.81 per cent in April 2016. So, if you have a real estate project in mind or if you want to renegotiate your mortgage, there is still time to act !

Marie-Eve F



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