Young French real estate buyers who are buying for the first time are getting less and less.
Even with low mortgage rates and incentives from banks for young buyers, according to a new article in Explorimmo, young first time buyers are struggling to enter the market.
The cause:
The difficulty to qualify for a loan
Lack of job security
According to Vousfinancier.com in a recent study of 5000 mortgage applications in 2014 the percentage of first time buyers was 55 percent earlier this year and at this moment in time is now approximately 29 percent.
The challenge appears to be that to get a loan French banks require buyers to have a confirmed long term contract called a CDI in French when in fact according to INSEE 84 percent of new hires into companies are on short term contracts called CDD in French. This means that the French banks are more likely to reject young buyer applications for a loan.
In addition, since in France unemployment has risen from 8 percent in 2011 to now 10.5 percent in October 2014. Many young buyers are becoming hesitant to invest in case they lose their work.
Read the complete article in French here
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