” The growth of loans to individuals remains strong “, it is in these concise terms that the Francia Bank summarizes in its latest study the market developments in July 2017. The Credither Guide returns point by point on the figures published by the monetary institution.
Home loans represent the bulk of loans
Let’s start with the statistics as a whole. All types of loans combined (real estate and consumer), loans to individuals increased in July by 6.2%, a rate that remains stable compared to last June (+ 5.9% in May). In terms of outstandings, the market weighs a whopping 1,135 billion euros.
In detail, outstanding loans are largely dominated by housing loans (933 billion), a growth of 6%. Consumer loans are growing a little faster: + 6.2%. But in terms of outstandings, we remain very far from home equity values (166 billion euros).
Outstanding home loans are increasing, but production is decreasing
Paradox. While outstanding home loans are increasing, production is decreasing. This is established in July to 19.1 billion euros, far from the 33.5 billion recorded in February.
This drop is to be compared with the fall in credit renegotiations, also known as real estate lending. For the record, this operation accounted for just over 60% of the production of new housing loans. Seven months later, the renegotiation share plummeted to 27%.
Real estate rates in near-stagnation
How to explain the decline in renegotiations? First, potentially renegotiable files are not unlimited. After the rush in recent months, the volume of real estate loans that could be bought back or renegotiated was bound to decline. An important point: real estate rates are still historically low. In other words, eligible households that have not renegotiated their credit can still do so.
Another reason is the decline in renegotiations: fixed interest rates are starting to rise again. After a bursting start to the year, average rates have risen very little in recent weeks, or even remain stable. The average real estate rate went from 1.61% in June to 1.62% in July. Figures close to our real estate rate barometers.