The number of building permits issued fell by 28.3% in one year

The new real estate crisis is getting worse. Provisional statistics, published Friday October 27 by the Ministry of Ecological Transition, show the authorization for the construction of 371,300 new housing units between October 2022 and September 2023, which represents an annual drop of 28.3%.

Certainly, authorizations had reached a record level over the previous period, due to regulatory deadlines. Since August 2022, however, the number of permits issued each month has stabilized at an extremely low level, around 30,000 per month.

The estimated number of construction sites started, which traditionally follows that of permits by a few months, is also eroding significantly, with 315,800 construction starts over twelve months, the annual drop is 16.6%. The opening of construction sites for individual houses has never been so few since 2000, notes the ministry.

The drop in authorizations concerns all types of housing, pure individual (− 31.8%), grouped individual including subdivisions (− 27.6%) and collective (− 28.3%). Residences (students, seniors, etc.) suffer a little less (− 19.7%).

“Nothing is happening, nothing, nothing. We’ve hit rock bottom”reacted to Agence France-Presse Pascal Boulanger, president of the Federation of Real Estate Developers (FPI).

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Feared job cuts

New real estate is experiencing both a sharp drop in buyers’ purchasing power and an increase in construction costs. The rapid rise in interest rates has excluded many buyers from the market, including first-time buyers, their incomes being further eroded by inflation.

Successive global crises (pandemic, war in Ukraine, etc.) have also caused the costs of construction materials to soar, and the tightening of environmental regulations on new projects adds further additional costs to operations. Result: the number of reservations recorded by promoters with individuals plummets.

The FPI predicts that in 2023 promoters should record half as much as a normal year. “The crisis feeds the crisis”comments Pascal Boulanger, with promoters stopping their new programs because they are unable to sell their production coming out of the ground. “Now is the time to buy, because next year there will be nothing left”he sighs, fearing for employment in the sector.

The French Building Federation fears 150,000 job losses in the sector by 2025, plus 150,000 others in related professions (architects, notaries, etc.). “That’s it, for three months, there hasn’t been a promoter hiring, we haven’t replaced resignations and retirements, and even among the biggest promoters, it’s gone”confides Pascal Boulanger.

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The World with AFP

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