Real estate figures in Ile-de-France in the red zone

The announcements about the economic indicators of the construction industry in Ile-de-France follow one after the other and they are all similar. Regardless of union or professional organization, the figures both in Ile-de-France and in the whole country are all in negative territory. This trend is not new and is an additional crisis added to a long list: the Covid-19 in 2020, the materials crisis, the energy crisis, etc. The construction sector is facing a new major crisis: the housing crisis.

”The second quarter of 2023 for the construction industry in Ile-de-France was marked by a housing crisis that is now no longer an assumption. It has serious consequences for construction companies. Bankruptcies, loss of activity, cash flow difficulties, and we fear that 2024 will be extremely difficult."explains Edouard Durieux, vice-chairman of the French Building Federation (FFB) of Ile-de-France.

"The housing crisis is a fact in Ile-de-France".

If the housing crisis has a particular reflection in recent months, the FFB Ile-de-France reminds us that in the Region, the lack of new housing has been a reality for more than a decade. According to their data, building permits issued in Ile-de-France fell by 14.6% in 12 months and by 22.8% in the whole of France. Construction starts fell more significantly at the national level (-13%) and in Ile-de-France (-9.4%). "Despite the slight divergence from national figures, the housing crisis is a fact in Ile-de-France and its effects will be extremely problematic for our companies, as new construction represents 47% of our turnover", complains Edouard Durieu. Looking at the departmental level, this crisis again emphasizes the territorial inequalities. In the department of Val-de-Marne, housing construction has increased by 28%, while in Paris the figure is -28.5%. "The first region of France is experiencing significant differences between these areas, which can be explained by different economic realities as well as the lack of land for new projects, especially in Paris", analyzes the FFB.

10 million square meters of empty office space. While the new non-residential construction industry has resisted in recent months, here too the curve is beginning to decline. Square footage that has started construction is down 14% at the regional level. The office market, which has been dynamic in recent years, is going through a very difficult period.

Raising MaPrimeRénov' budget by a billion euros a year. Regarding repairs and renovations in Ile-de-France, with an increase in activity of 1% year-on-year in the second quarter of 2023, this is the lowest growth in France. ”Despite all the potential of this industry in Ile-de-France, the companies capable of meeting the needs are not in a position to do so, in particular due to the misdirection of aid in the area of private home renovation”, considers the FFB. It expresses satisfaction with the increase in the budget for 2024 for MaPrimeRénov'. However, the FFB Grand Paris proposes to increase the budget by one billion euros per year for five years to meet the government's energy renovation goals. ”Professionals are trained, qualified and ready to take on the challenge of energy renovation. We know we can. You just need to give us permission”, the statement said. If repair and renovation activity does not increase in Ile-de-France, the construction industry could be severely affected by the end of 2023. According to the FFB, there is a risk of a 4% annual decline in activity across the territory by 2025 and the destruction of 100,000 jobs.