Why new housing is sinking a little deeper into the crisis

The collapse of new real estate continues. Already at their lowest, reservations collapsed again by 24.4% in the third quarter year-on-year, falling to nearly 15,000, the Federation of Real Estate Developers (FPI) announced on Thursday. “These are the worst figures for at least fifty years,” alarms Pascal Boulanger, president of the FPI.

The entire chain is affected. Due to lack of visibility, developers are freezing their construction sites: sales plunged by 32.1% in the third quarter, to 9,140 homes, a historic low. Nearly 28% of operations were withdrawn from marketing.

The reasons for the crisis are multiple. New construction has been mired in a serious crisis since mid-2022 which does not seem to be ending. The reasons are multiple. “The international context, the lack of confidence in the future with French people who do not have morale”, summarizes the boss of the FPI, also evoking the pre-electoral climate which maintains a wait-and-see attitude and inflation, which rose to + 3.4% over one year in October.

» READ ALSO - “To provide social housing, young households have been deprived of access to private housing”: developers claim that the SRU law has caused the prices of new real estate to rise. That’s not all. The absence of a sufficiently attractive purchase tax system penalizes the entire sector. “Pinel, which for a long time represented half of sales, has stopped and Jeanbrun, which replaces it, is not working,” notes Pascal Boulanger.

To make matters worse, rising borrowing rates make it more difficult for buyers to access credit. These difficulties have consequences on employment: the sector now only has 22,650 employees, compared to 35,000 people before the crisis.

Machine-translated from French