New housing is plunged into a deep crisis

The number of building permits (permitted housing) decreased by 23.7% in 2023 compared to 2022, 373,100 permits were issued. According to the Ministry of Ecological Transition. That is, almost 116,000 fewer permits have been issued throughout the year. The number of construction starts (homes started) fell by 22% in a year, the ministry said, to 287,100 homes. It must be said that the issuance of permits during 2022 was a record due to regulatory deadlines. But if we compare the permits for 2023 with the pre-Covid levels, between March 2019 and February 2020, they have also dropped significantly: -19%.

A ray of hope in this gloom: similar to permits, housing starts recovered in December (+22%) compared to November, with 26,900 housing units. But throughout 2023, construction works openings remain much lower than in 2022, with 287,100 homes, and also much lower than Covid (-24.6%). “The market is near the historic lows of 1992-1993 (275,000 units),” the French Construction Federation (FFB) warned in December, forecasting a 5% contraction in 2024.

The number of houses authorized and started, accumulated in 12 months (in thousands of houses). Photo: Ministry of Ecological Transition

These poor figures can be compared to the record number of issuances achieved in 2022 after a surge in permit applications at the end of 2021, before the more ambitious environmental regulations for new builds (RE2020) come into force. But they are mainly a reflection of a deep crisis in new construction, as in the entire housing sector. The reason? Declining demand with rising credit rates, lack of interest from institutional investors in rental investment, but also rising construction costs and land prices. “To make France stronger and fairer, we need to restore the homes of the Frenchasks the president of Véronique Bédague the promoter Proximity Investing in housing means getting the country going again!»

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