A 28.3% year-over-year decrease in the number of building permits issued

The crisis in the new-home market is worsening due to a decline in buyers' purchasing power and rising construction costs. According to preliminary data released by the Ministry of Environmental Transformation, 371,300 new residential units were authorized between October 2022 and September 2023, a year-on-year decline of 28.3%. Although permits reached a record high in the previous period due to regulatory deadlines. Since August 2022, the number of building permits issued each month has stabilized at a very low level of about 30,000 per month. The estimated number of construction starts, which traditionally follows permits in a few months, is also significant''s decline to 315,800 over the past 12 months, a year-over-year drop of 16.6 percent. Building site openings for detached homes have not been this low since 2000, the ministry notes. The decline in permits affects all housing types, including detached homes (-31.8%), group detached homes (-27.6%) and multifamily (-28.3%). Apartment complexes (student housing, senior housing, etc.) are slightly less affected (-19.7%).

"Nothing is happening, nothing, nothing. "

- reacted Pascal Boulanger, president of the Federation of Real Estate Developers, in a conversation with France-Presse.

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The new-build market is simultaneously suffering from a strong decline in buyers' purchasing power and rising construction costs. A sharp rise in interest rates has ruled out''many buyers out of the market, including first-time buyers whose incomes are also reduced due to inflation. Successive global crises (pandemic, war in Ukraine, etc.) have also driven up the cost of building materials, and stricter environmental regulations for new projects further increase the cost of operations. As a result, the number of reservations made by real estate developers from private individuals is declining rapidly. The Federation of Real Estate Developers predicts that in 2023, developers will have to record half as many reservations as in a normal year. 'Crisis feeds crisis,' comments Pascal Boulanger, noting that developers are stopping launching new programs because they are unable to realize their production capacity.'''Now is the time to buy, because next year there will be nothing left,'' he sighs, fearing for jobs in the industry. The French construction federation fears the loss of 150,000 jobs in the industry by 2025, as well as another 150,000 jobs in related industries (architects, notaries, etc.). "Since three months, no real estate developer is hiring, we are not replacing layoffs and retirements, and even the big developers are already giving up," says Pascal Boulanger.