Video - Real Estate Crisis: Why Are So Many Construction Sites on Hold?

In France, there is an annual need to build 460,000 residential homes, but by 2023, there will be a shortfall of at least 100,000. Those looking for housing have become desperate, and the construction industry will lose tens of thousands of jobs. This investigation was conducted by the 20 heures program on TF1.

Natalia and Michelle booked an apartment in Villefranche-sur-Saône a few months ago. On this day, they have a meeting scheduled with their developer. "We've thought it over and prefer not to make any commitments; there are too many uncertainties right now," Natalia states immediately. "Over twenty years, that's a huge expense, and we are forced to pay 1816 euros instead of 1500 euros a month, as stated in the booking contract a year and a half ago. But since then, interest rates have gone up."

Delays and cancellations have led to more and more clients backing out, like Michelle and Natalia. "In the past two weeks, we've had four cancellations, so we're struggling to move forward in the process, and we can't start construction," sighs Severin Moretto-Ranti in an investigation by the 20 Hours program on TF1.

Before starting construction, the CEO of Utiade Immobilier must sell 35 to 40% of the residential units. Ludovic Scarpari, a developer from Bron, was only able to begin construction with more than a year of delay. "We lacked clients, many did not have financing," he explains, "and we reached price levels that people are struggling to find financing for today, with rising interest rates." We knew that if interest rates changed, we would fail, but it happened very quickly," says Scarpari.

New residential bookings have fallen by 40% over the year across France.

This historic decline has also affected Ludovic. Together with his CFO, Frédéric Muriyon, they are reviewing the current projects. Both men note that none of the projects are going "perfectly." "I'm worried," admits the developer, "we knew that if interest rates changed, we would fail, but it happened very quickly." A total of six of his projects are frozen, which is equivalent to a year of work. For each of them, he obtained building permits and owes money for the plots.

The supply of social housing does not meet demand. With all these frozen construction projects across the country, the construction of social housing is also facing difficulties. At the annual HLM congress, the overall conclusion is that housing application intake points are under pressure, and waiting times have significantly increased. Over 300,000 applications in two years, an unprecedented demand that cannot be met, especially when it is much more difficult to free up already occupied housing. 360,000 housing units were built in the last year. At least 100,000 additional units need to be constructed, but we are far from that. Considering the announced halt of tax incentives for investments in rental housing, the task will be challenging.