Real estate: towards the end of the zero interest loan?

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Effective, zero rate loan (PTZ)? Not enough, according to a report commissioned in June by the government and whose Les Echos obtained a copy. Faced with very low bank rates, the PTZ is no longer relevant, says the mission, which advocates the eventual removal of this device, one of the main public support for the purchase of housing.

"The mission recommends not to extend the PTZ beyond the planned term," or 2021, have thus found the General Inspectorate of Finance (IGF) and the General Council of the Environment and Sustainable Development (CGEDD), two bodies dependent on the government.

Yet the PTZ, which compensates banks for interest that should pay some households on a mortgage, is strongly defended by the real estate sector, including homebuilders. Its magnitude has already been reduced. For new housing, it must disappear next year in so-called "relaxed" areas, that is to say where the supply of housing is considered sufficient in relation to demand.

PTZ, rarely a key element in the act of purchase

The report points to the lack of "efficiency" of this aid, considering that it rarely constitutes a key element in the act of purchase: without it, the new owners would in any case have acquired housing. Professionals in the sector and some economists, on the contrary, believe that the decrease in aid has contributed to the decline in housing construction – especially houses – over the past two years.

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"The effect of the PTZ with regard to its goal of first-time homeownership of modest households, in cases where it is presumed decisive, is ambiguous," the report responds. "Of the 1.9 billion euros that the PTZs granted in 2017 cost the public finances, 1.6 billion euros have no decisive effect", he adds, without excluding a "new mechanism". For example, through the direct payment of financial assistance.

The mission also points out that the aid is losing its reach given the very low level of mortgage rates, which have fallen in recent months to a new level.

Their number is in sharp decline. According to data collected by Les Echos, 122,408 PTZs were granted in 2017, 87,145 in 2018, and only 29,470 in the first five months of 2019.

This report goes against the lobbying efforts of the sector, such as the French Building Federation (FFB), to reintegrate the PTZ into a relaxed zone next year, as part of the parliamentary budget debates. Arguments yet relayed in the majority by some deputies, as the elected from Seine-et-Marne, Stephanie Do, which is expected to submit a favorable report on Thursday to the PTZ.


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