Why is this month of August “the time or never” to borrow?

“It’s time, it’s time. Before the hour it is not the hour. After the hour, it is no longer the hour. This quote, which you probably referred to as a child, could apply to your credit policy now. There is ONE specific time to borrow to make it as profitable and beneficial as possible, and that’s good, it’s now.

Although the borrowing rate has risen from 1% over 20 years in January to 1.85% now, it is well below inflation, currently 6% in France. “The real borrowing rate is therefore extremely cheap because it is predominantly negative,” agrees Stéphanie Villers, a macroeconomics specialist. The same observation from Philippe Crevel, economist and director of the Savings Circle: “The period is ideal for borrowing, especially if your salary follows inflation. It’s not every day that we have such a cheap Real rate! A situation that reminds the expert of the 1970s and 1980s when, in a similar context, many French took the opportunity to become owners.

Ideal time, uncertain market

Fans of real estate or good luck are not wrong because according to the Banque de France, loans to individuals are increasing, + 6.2% in June compared to the previous year and a nice estimate for July at 6.5%, a level recorded since which was no longer seen records from 2019 and the pre-health crisis. “Loans have been increasing for a few months and there is currently no sign of a decrease,” says Philippe Crevel happily.

Certainly a significant increase, but also no real rush. With such a large difference between inflation and lending rates, how can this reluctance be explained? However, it remains very uncertain whether the period is conducive to tactical placements: “Most French people have an enormous lack of visibility about the country’s economic situation and their professional future, which is not very suitable for borrowing,” Stéphanie Villers acknowledges .

The situation is ideal, yes, but only for “employees in established circumstances and with enough income to see the changes coming,” the expert specifies. Which, let’s face it, narrows the sample down quite a bit. According to an Ifop poll for Cafpi, 79% of the French believe that “we are still in the middle of a crisis”, 66% are concerned about the impact of inflation on access to credit and 57% believe that the level of inflation possibly increases delay a purchase plan. So no joy.

Rendezvous in unknown real estate

Uncertainty also reigns in the real estate market, the rules of which have changed since the health crisis: “We have seen unusual phenomena such as the fall in rental prices in Paris or a significant increase in areas conducive to teleworking. The whole question is whether these trends will be sustainable,” says François Geerolf, professor of economics and specialist in investment issues. Another situation that favors anticipation, hope for a fall in real estate prices in the future. But the situation is unlikely, according to the professor: “Unlike other developed countries, property prices in France have not risen that much, so there shouldn’t be a sharp drop.”

And tick-tock tick-tock, the clock is ticking and time is running out to borrow. The European Central Bank officially announced on July 21st that it would raise interest rates while inflation could soon peak. “Prices should increase less and less rapidly and borrowing costs will soar, making the real lending rate much less profitable,” notes Stéphanie Villers.

Tomorrow is far away

Philippe Crevel is formal: “It’s cheaper to borrow money today than it will be tomorrow. Soon conditions will be much less favorable, so of course there is a now-or-never movement among the French who can. By the end of the year, gross mortgage rates could average 3%. On June 29, the National Real Estate Federation (FNAIM) announced a “turbulent period” for the real estate market in its semi-annual report and expected a sharp drop in activity for the year-end.

The only glimmer of hope for François Geerolf is that the coming beginnings of the economy could restore the image of borrowing regardless of its profitability: “In times of chaos, real estate remains a safe haven, poorly correlated with the rest of the economic market. After the hour it is sometimes always the hour.