Real Estate Credit: France Is Stronger Than Spain Or Italy

2020-06-04   |   by CusiGO

The study was completed at the end of March and published at the end of April. However, the European Central Bank’s latest quarterly survey of the credit allocation of eurozone banks has not been denied. In the first quarter, it has seen the deterioration of real estate credit conditions and foresees a new screw tower in the second quarter.

In France, since December, the High Council for financial market stability has called on banks to act with caution, and according to real estate agents and agents, these forecasts have been verified on the ground. Although they provide a large amount of credit to enterprises, usually government guaranteed loans (“PGE”), they are more interested in family credit.

At the end of March, after several days of blockade, nearly 40% of French banks had reported a tightening of housing loan conditions, including an increase in interest rates, which were almost 0% by the end of 2019. No other major economy in the eurozone has experienced such drastic changes. A potential vigilance issue for the European Central Bank, the Council will meet on Thursday.

“Bank of Germany, in particular bank of France, referred to the low risk tolerance of banks in providing housing loans and the high risk tolerance related to the overall economic outlook, With regard to the outlook for the housing market and the credit problems of borrowers, the Monetary Agency pointed out in its survey.

On the other hand, Spanish and Italian banks did not report any changes in the credit standards for housing loans. According to the agency, “this may be related to the epidemic effect of earlier Coronavirus heart disease viruses on businesses rather than families.”. Both countries have imposed months of moratoriums on real estate loans.

Across the eurozone, banks reported a significant increase in demand for housing loans by the end of March (12 per cent, compared with 25 per cent in the previous quarter). In the second quarter, the net balance is expected to be – 67%. The European Central Bank noted that “this net percentage is similar to the percentage when Lehman Brothers collapsed in the second half of 2008”.