The total figures of French property mortgages granted by the French banks in 2010 should reach €140 billion in 2010, which is 17% more than in 2009, but remains far from the 2007 record of €170.23 billion, according to a study by the French central institution of property mortgage security “Crédit Logement/CSA”, published last Wednesday.
However, French mortgage rates have continuously kept on dropping since the end of 2008, getting closer to their historical floor (3.36% in the 4th quarter of 2005), to settle around an average of 3.42% in June, whereas they were still at 5.07% in the last quarter of 2008. The consequence for borrowers is a decrease of almost 10 % in monthly payments in comparison with 2008, emphasizes Crédit Logement.
“Unemployment and purchasing power outlooks are still standing in the way of a real upturn in mortgages” says Michel Mouillart, the author of the study.
Despite the war for new customers among French banks, the other phenomenon affecting the mortgage market is the soaring of French resale property prices, which are now about where they were before the 2008 crisis.
Since the end of the 90’s, French prices have risen by 140%, and are now 22 times higher than in 1964, which is much more than the inflation, Crédit Logement notes.
Source: Le Figaro