For those who want to buy a second home in France, it is good to know that it could be exciting to invest in real estate this winter. You also have an extra advantage if you have money in the bank. Because French banks have reached their limit of providing mortgages to their people, a working Frenchman or Frenchwoman can hardly get a mortgage despite having a good job.
Taux d’usure
This is due to the ‘taux d’usure’, the maximum legal interest banks can charge when they grant a loan. Because the buyer in France is protected against himself in particular, it is impossible to receive extortionate interest. That is an interest rate that the prospective buyer can hardly afford but would still accept because they want to buy that house.
In 9 out of 10 cases, French banks offer a mortgage for our customers. This has become increasingly difficult lately. What a bank wants to know before finally financing a maximum of 70% of the purchase price is sometimes almost embarrassing.
European Banking Authority
French banks have run out of money to lend for a few months now. Or better said, not getting permission from the French national bank to borrow money at a higher interest rate than usual. And so they don’t lend anything, so little is sold to French buyers. The French real estate agents who rely on the local market are now virtually at a standstill.
The most recently conducted stress test by the EBA (European Banking Authority) again shows that banks in the Netherlands, France and Germany are in poor shape. No wonder there is a capital flight to real estate abroad in those countries. ‘Put your money in stones’ is an old saying.
Therefore, anyone who has money in the Netherlands or Belgium bank should invest this in real estate in France wisely. Paris and the Cote d’Azur are the most popular and stable regions. The market may decline nationally, but these two regions will always retain value. Nice, the capital of the French Riviera has even become the beacon of stability because there is a lot of demand and relatively little supply of quality.
Your property for an apartment in Paris or a villa in the South of France is great to have and guaranteed a stable value that can only increase in value due to rising demand.
Winter 2023-2024 is the moment
For buyers who want to start the new year off right, it’s good to know that buyers with money have a better negotiation on the final sales price. After all, the local market is at a standstill, and if the seller is in a hurry, a good deal can be made.
The expectation is that in the spring of 2024, the banks will start reissuing mortgages, and the real estate market will become more accessible to the French.
However, those who want to make a good move now come to the south of France. Or Paris! See you soon!
