Fall of real estate credits and consumption: Why do the French no longer take?

French lending less and less, unprecedented trend that causes many questions about the country’s economic dynamics. Over the past six years, the contraction of the credit market has been translated both for the caution of households and for structural problems with real estate and consumption. The detention rate has fallen to the lowest level of longer than thirty years, a situation that even exceeds the shock wave caused in 2008. The financial situation of households.

Historical Credit Collapse in France

The credit market has seen an unprecedented decline and, according to The Household Credit Observatory (OCM) since 2019, more than a million loans since 2019. This figure illustrates even more contraction than after the financial crisis in 2008, where the decline was limited to 660,000 credits. The detention rate in 2024 dropped to 41.9 %, compared to 42.7 % in the previous year and 47.4 % in 2019, which reached its lowest level for more than three decades. In fact, “the French delay their purchase decisions and postpone their investment projects”, analyzing Maya ATIG, CEO of the French Bank Federation (FBF) and Solenne Lepage, General Delegate of the French Association of Financial Companies (ASF).

The decline in consumer credits is even more pronounced. Only 19 % of households have a consumer loan in 2024 compared to 20.9 % in 2023 and 26.5 % in 2019, which is historically low threshold since 1989. This decline is explained by the real estate market, which also reduces The needs of financing, but also a decline in the purchase of household equipment, cars and reconstruction work. Thus, economic uncertainty forces households to postpone their expenses and wait for a more favorable situation.

Towards a gradual recovery in 2025?

Despite this credit contraction, some indicators indicate a possible improvement. Inflation slowed by 2 %in 2024, offering a slight relaxation of the purchasing power of households. In addition, 85.4 % of debtors today estimate their supportable costs of compensation, reflecting a gradual return to financial stability. However, these increased caution is also supported by uncertainties associated with the labor market and economic consequences of cavin.

The prospects for this year 2025 have a slight restoration of subscription projects. According to OCM, consumer credits should increase to 3.7 % in the first half of 2025 (compared to 3.5 % in 2023), while real estate loans should increase up to 3.1 % (compared to 2.8 % in year 2023). Although this bounce remains mild compared to historical averages, it testifies to the gradual return of trust. However, this recovery can be reduced by external factors, especially political development and stability of the labor market.

If the decline in the loan in France reflects the unprecedented care of households, the first conversion signals will appear. The improvement of the financial climate could support a gradual recovery during this year, although it remains conditional on the development of economic and political context. For players in the credit and real estate market in France, the coming months will be decisive or denying this trend.

Luc Jose A.

Graduate of Science after Toulouse and holder of Blockchain Consultant Certification, published by Alyrou, joined the adventure of Cointtribuni. The general public about this constantly evolving ecosystem. My goal is to allow everyone to better understand blockchain and take the opportunity they offer. I try to provide an objective analysis of messages every day, decrypt trends on the market, hand over the latest technological innovations and introduce the economic and social issues of this revolution.

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The words and opinions expressed in this article are involved only by their author and should not be considered investment counseling. Do your own research before any investment decision.