Demouilliez (FPI Normandy): Facilitating access to housing for first-timers - Enterprise Journal - Normandy

>

How do you perceive this new crisis in the construction industry? Surprisingly, it's a supply and demand crisis at the same time, which is rare. We are seeing less demand from first time buyers and investors, so construction is slow. Normandy sales are down 4% in the first half of 2023 compared to 2022. We also see that waterfront properties are still in high demand, with rising prices, and luxury properties also remain in demand. However, the crisis began later in Normandy than in the rest of the country. 2022 was a good year for the region, but we can't yet explain exactly why. This may be because the coast and major cities have been able to resist.

Are there any peculiarities of the crisis in Normandy? The Normandy market is less prone to sharp fluctuations than in other regions. Overall, we have healthy markets here. We have not experienced strong price increases. So I'm not too worried about our Normandy market. In addition, we are seeing a certain relocation from Paris to Normandy, with a large number of transactions in the secondary housing sector, especially concerning houses. We are also very attractive because of our coastline.

What are the consequences of this crisis? The direct consequence is the strain on the rental market. Today, real estate has stagnated because people are no longer buying because of high interest rates. The terms of the loans do not allow for the desire to leave the rental and become an owner. Social landlords have reduced turnover from 12% to 8% per annum.

What solutions can improve this situation of crisis? There are several ways. The first is to work on VAT, as we are significantly increasing VAT by remitting 20% to the government every time we sell a home! The second is to use the Pinel program, which entitles you to tax relief when you buy a home for rent. But it has now deteriorated and will be abolished in 2024, although it is an attractive tax scheme for investors and therefore positive for the market. Another idea is to exempt new estates from inheritance tax. This will be a new incentive to buy as it means a free transfer of ownership for those who have bought the property. Such a measure could be positive for investors.

There is a need to review the terms and conditions of the fixed interest rate concessionary loan (PTZ) for first-time buyers to facilitate access to property. The problem is that construction costs in general have increased, as have land prices, with cities forcing us to build more expensive high quality projects. But we shouldn't let a new apartment turn into a luxury dwelling. One can imagine a reduced VAT rate for first time buyers, e.g. 10%. And an effective PTZ that will allow us to attract people capable of becoming owners. After all, we shouldn't be too pessimistic, there are sectors that are still doing well downtown, especially premium programs.