Creating conditions for mortgage loan processing: government and BDF decisions.

Official economic authorities and the Bank of France are set to revive the real estate market by introducing new rules. An analysis of the state of the market in 2023 found that the situation leaves much to be desired.

The year has clearly not been the best for real estate agents and notaries who are feeling the effects of this situation. No wonder, as interest rates on loans have risen from 1% to 4.5% in just two years, and now potential buyers are finding themselves in a difficult position. Many willing buyers have also faced rejections as banks have tightened their requirements to the point where many potential buyers have found themselves unable to buy property. In light of this, what can be done to revitalize the real estate market?

The term of real estate loans has been increased from 25 to 27 years, unless the loan contains a type of investment exceeding 10% of the total amount. This is probably to encourage buyers to purchase old properties and renovate them, thus contributing to environmental transformation.

Banks are not currently required to justify their refusals to provide a mortgage loan.

While these solutions seem logical, they do not address the underlying problem of a challenging real estate market. The economic situation of the French is not improving, real estate prices are not falling enough to offset rising interest rates. The market can't really revitalize in the near future. On this occasion, the Federation of National Real Estate Agency (FNAIM) called the measures "insufficient due to the scale of the crisis". Certainly the situation will not improve tomorrow, and interest rates are not expected to fall until 2025.