Between soaring real estate prices and debt rules, 30% of files no longer pass

In her last observatory, Meilleurtaux is concerned about the accumulation of phenomena that prevent individuals from carrying out their real estate projects.

Prices are the hot topic at the moment. “Since the end of February and the beginning of March, they have been rising at an incredible speed,” Miliorto notes at his last observatory. But above all limiting this brutal increase, explains Maël Bernier, Director of Communications and spokesperson for the broker: “We are currently seeing a return to 2017 levels, so the rates per se are still very low. We have been used to them for nearly two years at rates that were About 1%, and even less, it is true that the rise in rates in a few months, to reach almost 2% today, disturbs borrowers somewhat. Even if we take into account that the rates are at 2% with respect to inflation of more than 5 % is still a very comfortable situation.”

Admittedly, rates are still below inflation, but this increase still undermines the real estate purchasing power of families. Some are no longer able to find financing. Thus Miliorto notes a decrease in the number of cases that meet the criteria for debt. The broker explains that in January 2021, at rates of time, 71% of files were below the 35% bar of indebtedness, and therefore qualify. “A year and a half later, in June 2022, the number of files that can be funded has dropped dramatically. Only 59% of files are below the critical 35% mark. Currently, we have more than 10% of files in a ‘critical area’ and nearly 30% Totally unfundable.”

Ax wear rates

Obviously, the wear rates still prevent the coils a little more. As of July 7, 2022, for loans with a term of less than 20 years, the rate is 2.60%. Loans equal to or greater than 20 years are 2.57%.

“Currently, wear rate bans the majority of new borrowers, regardless of profile, because rates are going up quickly. Whoever said the rate hike is fast, says the rate of wear has arrived more quickly. It’s a preventative check-out device that has become a pure and simple exclusion ‘, according to Maille Bernier.

The broker gives the example of a 42-year-old couple, with a net monthly income of €3,500, who will borrow €220,000 over 20 years at a rate of 1.85% excluding insurance, with 100% shares insured on the woman and 50% on the man, the borrower’s insurance at 0.40 % Deposit € 2,260, annual interest rate of 3.04%. The wear rate was exceeded, and therefore the coil was inevitably rejected. or a single person aged 30 years, with a net monthly income of €2,500, who will borrow €150,000 over 25 years at a rate of 2% excluding insurance, with 100% insurance, a borrower’s insurance at 0.27% and a deposit of €1,700, APR rate It is a total of 2.59%. The wear rate is also exceeded in this case, the coil does not pass.

Mile Bernier concludes: “If there is a rise in interest rates, it is still very interesting for borrowers to finance themselves with credit, even at 2% in terms of inflation! However, today there is a significant threat to the financeability of real estate projects due to various regulatory restrictions We see more and more blocked files, which today represent a third of the good ones. The geopolitical context is still weighing on the situation, so it is important to be careful. Finally, we must be very clear, we are relentlessly heading towards a complete deadlock, if not Reform usury, and rejected applications will continue to pile up, without a back-up solution for the French who dream of “getting into real estate”.

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