The number of new housing starts has plummeted over the last twelve months in the Paris region, and is at its lowest since the real estate crisis of the 1990s. The French Building Federation is calling for measures from the new government to revive the sector.
© Getty / Thomas Trutschel
The housing crisis continues to wreak havoc. According to the French Building Federation (FFB) Grand Paris Ile-de-France, which presented its latest economic report to the press this Wednesday, September 25, new housing starts plunged by -25% over one year in Paris region. Only 44,500 constructions were launched between June 2023 and June 2024 in Ile-de-France. “The construction market is at its lowest, we are falling back to levels that we have not seen since 1990, alarms Edouard Durier, vice-president of the FFB in charge of the economy. The downward trend continued to intensify throughout the year, due in particular to the fall in construction authorizations and the explosion in land prices.» The situation is all the more critical as new construction (as opposed to renovation) constitutes around 48% of the turnover of companies in the building sector in Ile-de-France.
This drop in the number of new housing constructions, which is even more marked in Ile-de-France than nationally (-21%), is explained in particular by the increase in mortgage rates. The latter in fact increased by around three points between the start of 2022 and the end of 2023, which prevented a large number of first-time buyers from purchasing their first property. In addition, the prices of materials used for construction have also skyrocketed since 2022 due in particular to the war in Ukraine. THE prices of new housing have thus reached record levels. In 2023, the average selling price of a new single-family house – excluding construction in a subdivision – rose to 216,000 euros, compared to 198,900 euros in 2022 or even 174,600 euros in 2020, according to the FBB.
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Measures expected by the building sector
“We expect a lot from the new government, which must put in place new tax measures to revive the construction sector.announces Edouard Durier, in the wake of comments made on September 17 by Olivier Salleron, the president of the national FFB. The latter calls for a return to zero-rate loans for individual houses as well as apartments, and in all territories As a reminder, since its refocusing on April 1, 2024 zero interest loan is currently reserved for households who purchase new housing in collective residential buildings, located in tight areas (where the demand for housing is much higher than the supply), subject to resource conditions.
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