Negative ebc rates spell positive signs for property investment

Photo credit: Eisenrah

The ECB cut its deposit rate for lenders to -0.1 per cent in an attempt to encourage lending, while also slashing its benchmark rate from 0.25 per cent to 0.15 per cent.

The bold move from President Mario Draghi was also accompanied by an agreement to consider unconventional measures, such as quantitative easing, to boost inflation on the continent. In response, the Euro fell to a four-month low, while inflation last month dipped to 0.5 per cent, far below the ECB target of circa 2 per cent. Nonetheless, lenders in countries such as France as optimistic.

"“Draghi has been suggesting a rate cut for a while now so this move finally demonstrates how serious the ECB is about boosting the Eurozone economy,” John Busby at French Private Finance told Complete France.

"French interest rates already hit record lows this week, largely from competition in the domestic market and weak economic data, and now they’re likely to go down even further."

Indeed, French property has seen its popularity soar on TheMoveChannel.com in recent months, even overtaking Spain as historic low rates make real estate far more affordable.

French Athena Advisors have also reported an 85 per cent increase in sales year-on-year in the six months to May 2014.

Nicholas Leach comments: "It took a while but international buyers are now realising the significance of the current deals available in the French mortgage market. Being able to fix rates for long periods at such low levels means that, unlike in the UK for example, people can easily plan their long term finances for their second home or buy-to-let property. The lure of these new rock bottom rates coupled with the long term security typical of this market, means we’ll see more people releasing idle savings and investing them in French property."