This is not necessarily a surprise, as the housing crisis has been bogged down in recent years. Reservations for new homes fell again by 25% in the first quarter of 2024 compared to the same period in 2023, figures show published this Friday May 17 by the Ministry of Ecological Transition.
Reservations for new homes reached 15,131 between January 1 and March 31, 2024, a drop by almost two of the level recorded even two years ago. The decline compared to the year 2023 concerns new constructions (-25.9%) as well as construction on existing buildings (-16.2%), specifies the ministry.
The drop in reservations is a little more marked for houses than for apartments, the core business of developers. However, over one year, apartment reservations fell by more than 24%.
“Catastrophic, cataclysmic figures”
The real estate sector has been warning about this crisis for many months now, particularly in the new construction sector. The situation is particularly complex for developers, for whom construction site costs have increased as a result of the rise in prices of construction materials and the tightening of environmental requirements. But the context is not much better for demand, which has fallen due to unfavorable conditions for borrowing and the end of tax loopholes favorable to investment.
“We thought we had hit rock bottom, but we continue to have catastrophic, cataclysmic figures,” commented at the beginning of the week the president of the Federation of Real Estate Developers, Pascal Boulanger, who estimated that the rebound “is not for right away”.
“Given the gradual disappearance of supply, any return of demand will be nipped in the bud, due to a lack of housing adequate to meet the needs of households. The future risks being even bleaker than it is currently,” he added this Friday in a press release.
Last March, it was the French Building Federation which warned of an acceleration of the “plunge into the abyss of new housing”, with the fear of nearly 90,000 job losses by the end of the year 2024. There will then be many expectations from the sector around the housing bill, presented to the Council of Ministers at the beginning of May and which will be examined in the Senate from June 17.