Real estate credit: France champions rates in Europe

Crédit Foncier has published the sixth edition of its European study on mortgage lending. France has confirmed its dynamism in this area thanks to low rates and a very reasonable level of debt per household.

France is moving towards a dynamic mortgage market, apparent based on the latest edition of Crédit Foncier’s annual study on residential real estate loans. The study covers the 28 member countries of the European Union.

France bronze medal of credits

With €984bn outstanding at the end of 2017, France accounts for nearly 15% of total outstanding mortgage loans in the EU. This puts it in third place in the pack of countries with the highest volumes of loans, just behind Germany (with €1.175bn) and the United Kingdom (€1.360bn). According to the study, Germany and the United Kingdom alone account for 40% of mortgages while they represent only half of the population in Europe.

A French market growing faster than the European average

At the European level, Crédit Foncier reported that €6.4bn were outstanding at the end of 2017, depicting an annual increase of around 4.3%. By comparison, the French market recorded a volume acceleration higher than the European average with growth of 6% over one year.

2017 – an exceptional year

This situation is owed to the fact that: “France stands out above all for its very low level of pricing. It displays the most attractive mortgage interest rates among major European countries: 1.56% in the second half of 2017, compared to 1.83% in Germany, 1.92% in Spain, 2.05% in United Kingdom and 2.42% in the Netherlands “, reports Crédit Foncier. It must also be added that the year 2017 was exceptional in terms of real estate transactions since they closed in on the one million mark and recorded an increase of more than 15% compared to 2016.

A favorable situation that should last in 2018

With lower borrowed amounts, a reasonable level of debt and some of the most competitive rates, France could continue to benefit from this “state of grace” during 2018. Thus, on the side of the rates, the fuel of the market, it’s still calm with rates still below 2% and, in terms of activity, if the frenzy experienced by the soaring market in 2017 seems positive, professionals now expect a soft landing and more reasonable volumes but with stable prices.