Real estate market crisis: beware of infection, warn professionals.

Professionals in the construction, housing, and building industries are sounding the alarm: their sector is facing significant challenges and, in their opinion, this could have an impact on the entire economy. Published29/01/202410:34 Reading time:3 min.

The era of euphoria in real estate has ended.

Inflation and rising interest rates are making access to credit difficult for families. According to the National Real Estate Federation (Fnaim), the French have lost25% of their purchasing power in just two years. Standards and obligations for homeowners have also become stricter, such as the energy diagnosis, which prohibits renting out property that does not meet certain criteria, stimulating the sale of energy-inefficient housing. These factors destabilize the sector, leading to a reduction in construction and real estate programs. As a result, the activity of real estate agents, notaries, brokers, builders, developers, and others, is decreasing. Almost a thousand real estate agencies have closed in the last year, and major developers have reduced their activity. This real estate crisis could lead to a more general crisis. The reduction in available housing leads to a limitation of geographical mobility. Moving or changing regions for employment becomes very difficult and reduces the chances of reducing unemployment. The situation also affects birth rates. Young couples who cannot find housing postpone having a child.

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The same thing happens to families who want to increase the number of members. Therefore, if access to property ownership becomes an unattainable horizon, especially for the middle class, faith in the future is called into question, and this fuels anger. Therefore, housing is a very important factor in the economy. We expect the government to understand the importance of this issue, but so far has not appointed a housing minister. For professionals, this is a very bad sign. Another blow, in their opinion, is the abolition of the Pinel tax exemption, which encourages wealthy citizens to invest in rental housing to reduce their taxes. This measure, which costs the state more than1 billion euros per year, must be abolished by the end of2024. For the government, this is a step towards savings. But besides these events, some politicians believe that the state has helped this industry too much and what is happening is only a restoration of balance, normalization. Everyone protects their interests. And this is more like a dialogue of the deaf. Let's see what Gabriel Attal will say, who clearly plans to discuss this issue in his speech on overall policy on Tuesday, January30.