Real Estate: the production of new housing is out of breath

Real Estate: the production of new housing is out of breath

Developers have made no secret of fears of a drop in new home sales: they fell by 20.2% in the first quarter compared with the same period in 2021. In terms of bookings, they also fell (29,628 compared to 37,139 and a year earlier). This is not a shortage of demand, but a commercial supply that cannot be restored and remains one-third below the level of 2018 or 2019. Stocks and promoters sell stocks in record delivery times, an average of 7.7 months compared to the usual 11 or 12.

“The engine stops, lack of fuel!summarizes Pascal Boulanger, President of the Federation of Developers (FPI). We have never sold so little since 2012, the volume of projects has never been so low and Institutional customers, investors, social landlords have limited their purchases due to lack of projects. The number of housing units sold in total decreased by 31%, while sales of units to owner-occupiers decreased by 8.3%.he says.

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Social landlords also have trouble getting projects out. “In 2021, there were 104,800 approvals, while the minister expected 120,000, and not all of them will be used, because rising construction costs or some failed tenders are hampering the start of construction sites, and in 2022 I expect even fewer operations. ” explains Marcel Rogemont, president of the Federation of Public Housing Offices.

Rocket rising costs

Inflation and rising prices of materials – tiling, paving, metals, wood, PVC, glass, insulation, plasters, paints, adhesives, adhesives… – exacerbated by international energy price tensions, actually inflate construction costs by 15% to 20%, which leads to an increase in the final price for the buyer by 7% to 10%.

Another obstacle to construction is the increasingly limited access to credit, for which rates and insurance costs are rising. Buyers’ solvency is already weakening the increasingly expensive new square meter: an average of € 4,524 in the regions, ie + 5.8% compared to 2021, and € 5,573 in Ile-de-France (+ 3.4%), where it seems that a certain ceiling has been reached, according to some advertisements offering, for example, a kitchen or notary fees.

Even more worrying for the FPI is the mayors’ reluctance to issue building permits. However, these entitlements actually jumped to 134,400 in the first quarter, or 25% better than in 2021, which Housing Secretary Emmanuelle Wargon welcomed at the time. “But this increase is artificial.”, as it is supported by the peak of the number of permit applications submitted at the end of 2021, before the entry into force on 1.ehm January 2022, new environmental regulations, known as RE2020, which are much more demanding, Mr Boulanger predicts. From the second and third quarters, this number will decline. »

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