The Paris real estate market is a mixed picture with some areas seeing price reductions, with others showing good growth.
Price evolution in Ile de France in February 2013
Paris 75 -0.8%
Hauts de Seine (92) -0.8%
Seine-Saint-Denis (93) +2.1%
Val de Marne (94) -0.1%
Suburbs (92-93-94) 0.0%
Large crown (77-78-91-95) +0.1%
As for interest rates, it was difficult to believe that they could still go to a lower level but in fact they now have with some banks taking off another 0.25% from their main rates and margins. From here the trend should be for rates to remain stable, though many experts said that before the TEC 10 decreased by more than 0.50%.
The main factors which should keep rates low from here are:
- The low-level of inflation which should keep the European Central Bank (ECB) headline rate stable.
- Bank maintaining rates and margins to attract new customers.
Prospective buyers in France can expect to borrow at 3.00% over 15 years, 3.35% over 20 years, 3.50% over 25 years
The latest monthly assessment conducted by the Bank of France shows that 8% of the surveyed banks have tightened their credit standards for housing loans. 29.6% of banks surveyed seeing a decline in demand for mortgages. This further tightening coming after the fact that the total number of granted loans fell sharply since the beginning of 2013 by -27.2%.
According to the Observatory Crédit Logement / CSA, in February 2012, the personal contribution was up 1% year on year since the beginning of 2013, after 4.1% in 2012 + and + 9.8% in 2011 making the average increase more than 15% in terms of personal contribution in the last two years.