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Real estate credit: the rates impacted by commercial tensions?


 

According to the latest national barometer of real estate prices published by Melinggo, mortgage rates will rise in the second half of 2018. Why ? The real estate valuation expert puts forward three interrelated reasons: trade tensions between the United States and Europe, internal political tensions in Europe and sluggish economic growth. What is Creduloan Agents’ vision in detail about these reasons?

A collateral damage from the trade war?

A collateral damage from the trade war?

Their latest barometer, released in July, explains the expected rise in mortgage lending rates (historically low) by current trade tensions between America and Europe (which could be the consequence of the US-China disagreement).

A dispute that exerts inflationary pressure since the US president decided to tax $ 34 billion of imports made in China. This shift could threaten global economic growth, which is based on international trade. Because this leads to an increase in prices and therefore a decline in purchasing power, estimated at € 1,125 per capita in France according to the Economic Analysis Council. The loss of GDP (-3%) could have the same consequences as the crisis of 2008 for the Hexagon according to this group of independent economists…

Fewer transactions and lower real estate prices?

Fewer transactions and lower real estate prices?

According to Melinggo, the causes of the upcoming increase in real estate rates in France could therefore   to be “The inflationary pressure of trade tensions between the United States and Europe, the risks of political disunity in Europe and a slowing of economic growth”. Fonacier Credit had already predicted at the beginning of the year an average rate of 1.65% for the mortgage loan by the end of 2018, based in particular on the rise in the OAT (equivalent Treasury bonds), which could iron beyond 1% to 10 years.

Creduloan Agents is also considering a decline in real estate activity in terms of volume of transactions… which should lead to a decline in real estate prices. But for the time being, the mortgage rate continues to average below 1.50% (1.46% in May according to the Housing Credit Observatory / CSA).

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