Decision Made on Implementing New Building Loan Rules in the Netherlands
After a steady rise since 2022, mortgage interest rates in France have shown signs of stabilisation, according to recent data. The average mortgage interest rate in the country stood at 3.49% in Q2 2024, up from 2.89% in the same period the previous year [1]. However, consumer expectations for the next 12 months indicate a slight decrease, with mortgage interest rates expected to be around 4.4% [2].
This potential nearing of a floor or stabilisation in mortgage rates comes as the European Central Bank (ECB) is anticipated to cut interest rates in the future, due to easing inflation [4]. The stability in rates follows a steady decline from a peak of over 4% at the end of 2023.
Notably, one bank has lowered its rates by 0.10 percentage points, while many others have kept their rates unchanged from June [3]. Sandrine Allonier from Vousfinancer had one of her best months in June in at least two years, suggesting that some borrowers may be taking advantage of the current rates [3].
Caroline Arnould, CEO of Cafpi, believes that rates can't drop much further, echoing the sentiments of Pascal Courtois, head of banking relations at Artemis Courtage [3]. In light of this, the CEO of Cafpi recommends borrowers to sign the mortgage they're offered today, without waiting for a potential rate drop by the end of the year [3].
In addition, many banks are extending offers of loans at bonus rates or doubling the amount of zero-rate loans until December, particularly for first-time buyers and those buying properties with good energy performance diagnoses or carrying out energy renovation work [3].
Jordan Frarier, CEO of Foncia Transaction, is cautious about rates dropping much further, reflecting a general consensus among industry experts [3]. The average rate of 3% for the past 25 years is considered significant by Pascal Courtois, with a "good" profile, at least 70,000 euros in annual income for a single person and 100,000 euros for a couple in the Paris region, potentially qualifying for these lower rates [3].
As the real estate market prepares to close out the year, Charles Marinakis, president of the Century 21 France real estate agency network, estimates that it will end with 850,000 transactions [3]. With mortgage rates showing signs of stabilisation and potential future declines, the market may continue to remain active for homebuyers.
[1] Source: L'Institut national de la statistique et des études économiques (Insee) [2] Source: Banque de France [3] Source: Les Echos [4] Source: European Central Bank (ECB)
Investors in the French real-estate market might consider securing mortgages now, as rates are expected to remain relatively stable due to the stabilization shown recently and potential future reductions, according to experts like Caroline Arnould, CEO of Cafpi. With many banks offering bonus rates and extended zero-rate loans, especially for first-time buyers and energy-efficient properties, this could be an opportune time for financing property investments.
