4 suggestions from Bruno Le Maire to revive the real estate market

This Wednesday, the Minister of Economy shared proposals to revive the real estate market. Open your ears, we’ve deciphered what the Bercy boss is suggesting to help prospective buyers buy.

What was our surprise when we found out this morning in Le Parisien that the Minister of the Economy is proposing a solution to get out of the real estate crisis. We almost dropped a croissant in our coffee! So is Bercy worried about future buyers? That’s good, so are we.

But what suggestions did Bruno Le Maire pull out of his hat?

Bruno’s 4 suggestions:

  1. Relax the lending rules
  2. Create a concessional loan at a “mid-rate”
  3. Adjust the PTZ scale
  4. Facilitate the marketing of empty apartments, such as second homes

Well, since we’re nice, we’ll list the details one by one to help you see things more clearly. PS: Remember these are only “suggestions”. That said, it doesn’t cover much. But it’s nice to suggest now.

1.Relax the rules for granting bank loans

We remind you that banks cannot lend for more than 25 years debt ratio may not exceed 35% of income. Bruno Le Maire considers these rules to be too strict and has proposed easing the level of indebtedness.

The problem: The High Financial Stability Board (HCSF) – chaired by Bruno Le Maire, by the way – yesterday completely rejected the idea of ​​limiting the risks of over-indebtedness. Funny, right? Communication, just like in a relationship, is important.

HCSF is instead encouraging banks to use their options to deviate from the rule. In fact, banks can exempt up to 20% of their loan production per quarter from this rule. However, the Financial Authority points out that banking institutions do not fully use this option (this exception concerned 13.8% of total production in the 2nd quarter of 2023).

In short, while the money is being thrown around nicely, more and more households are forced to postpone their real estate project. It’s not cool.

2. Create a loan with a preferential rate

It has nothing to do with a good bottle of Burgundy, here Bruno Le Maire suggests creating a mezzanine loan to help households. A system that existed in the 1970s that offered half the market rate, with the state absorbing the difference.

It looks promising on paper. Even if it is a little light on the projection: what about the conditions for obtaining and financing such a loan? we want to see.

3. PTZ scale reform

This zero rate loan is a concessional loan that is eligible under certain conditions and for which the recipient does not pay interest. However, the grant conditions were tightened for budgetary reasons. But that was before rate increase.

The situation has changed today! (hello rates at 4%). Bruno Le Maire therefore proposes a revision PTZ scale so that more young households have access to it. Nice. It remains to know the details of the new levels, to know who it might affect tomorrow.

4. Facilitate the marketing of housing that is currently vacant

According to the minister, the challenge is to put real estate into circulation and increase sales. How ? By searching among the 4 million unoccupied second homes (like this seaside house you see with the shutters closed 10 months of the year). Great potential, indeed.

But there is a catch. Owners must wait 22 years to avoid paying tax on the sale of their second home. A little long for a market relaunch in 2024, you’ll agree.

Can I expect a capital gain tax exemption on the sale of these residents? This measure has already been proposed by the Renaissance MP for Indre-et-Loire Daniel Labaronne. An amendment is said to be in preparation. The future will tell.

Finally…Bruno’s additional suggestion:

He also personally said that he is in favor of postponing the ban on renting energy-intensive apartments. In an economic situation where the French are finding it difficult to buy, he says now is not the time to reduce the number of properties available for rent.

“I’m a member of the government, so I’m supportive. But on a personal level, I’m very much in favor of it, especially when it comes to co-ownership.”explains Bruno Le Maire.

Remember that the ban on the marketing of these thermal grids was originally planned for the glorious year 2025 DPE Act. From January 1, it is no longer possible to rent accommodation that consumes more than 450 kWh per m2. The speaker of the parliament, Yaël Braun-Pivet, has already objected to the proposal to postpone the measure.
We respect Bruno’s position, but his “personal opinion” is not very binding. Proof, he very quickly backed upensuring that a change to the current schedule is out of the question.

Pretto counterattacks: our suggestions

  • Increase the maximum leverage ratio to 38%: that would instantly get 8% back. borrowing capacity with an equivalent income, again enabling 1/3 of projects currently excluded. At market scale, this represents 10-15% more transactions or 100,000-150,000 additional transactions.
  • Use this borrowing capacity in addition to energetically virtuous goods or financing renovation energy of thermal filters. This would make it possible to finance these key societal issues without additional public investment.

Finally, we leave the microphone to Pierre Chapon, co-founder of Pretto:

Today, households are caught between high prices and significantly reduced borrowing capacity. Only an increase in leverage would be good news for prospective buyers. In addition, this increase could moderate in the coming years if rates fall, offering opportunities for credit renegotiation.

Pierre Chapon, co-founder of Pretto

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