New shock for real estate developers. According to the latest report from the Ministry of Ecological Transition, the sale of new homes continued to fall in the second quarter: – 11.7% over one year.
The decline concerns more individual houses (–14%) than apartments (–11.5%). Reservations have also collapsed: they have fallen by 13% compared to last year. In addition, 13.5% of these reservations were canceled: this is three points more than the previous year.
To explain this decline, industry professionals identify several factors.
A supply blocked by inflation…
Firstly, on the side of the builders, the obstacles to carrying out the projects are becoming more and more numerous. Currently, they have to contend with rising material prices. This inflation is reflected in the price of new housing, on average 5% more expensive than last year.
For a long time, the increase remained “moderate” according to Henry Buzy-Cazaux, president of the Real Estate Services Management Institute (IMSI), because, «first, the promoters reduced their margins. But inflation became such that they were working at a loss. They therefore prefer to postpone the construction sites ”.
The main reason for the decline in supply, however, lies in the insufficient issuance of building permits by mayors. «People don’t want to see buildings near their homes anymore.explains Philippe Boulanger, president of the Federation of property developers (FPI). Local elected officials have no real benefits, no more financial motivation, and take the risk of seeing petitions overflowing on their desks… So they put away their pens. »
…and the proliferation of regulations
Another obstacle to the granting of permits is the rule of “zero net artificialisation(ZAN). Introduced in 2021 by the Climate and Resilience Law with the aim of slowing urban sprawl in natural areas, this regulation obliges mayors to “deurbanize” surfaces equivalent to those artificialized.
Henry Buzy-Cazaux explains that local elected officials recognize the merits of such a measure. But according to him, the legislation remains too vague. « Favor density rather than sprawl, vertical rather than horizontal… We need a clear instruction manual so that they can achieve thismartèle the real estate expert. And since they don’t have it, they stop issuing permits. »
Finally, there are the provisions of the RE2020 environmental regulations, which came into force in January 2020, “necessary, but extremely demanding”, according to Henry Buzy-Cazaux. Legislation already favored an increase in construction costs (materials, training, etc.). “It also imposes rules on real estate developers that are sometimes incompatible with local urban plans,” completes Philippe Boulanger. The president of the FPI demands a « pause normative » for his sector, overwhelmed with new obligations.
Interest rates and usury rates, demand barriers
On the other side of the equation, among future buyers, the market situation is also far from favorable. In addition to facing rising prices and a reduction in the supply of housing, buyers must contend with the decline in their purchasing power and rising interest rates.
Real estate brokers point to the problem of the rate of wear, which would be the cause of more than 39% of refusals of bank loans according to a survey by Opinion System for the French Association of Intermediaries in Bancassurance (Afib).
Supposed to protect consumers from abusive rates that banks could set, this rate currently stands at 2.57% for loans of twenty years or more. An easily attainable ceiling for an average purchaser, if we add miscellaneous costs.
Currently, the wear rate is reviewed every three months. Professionals denounce a ceiling rate « in delay » on reality. While some advocate reviewing the calculation method, others call for its suspension or even its abolition, like the Federation of Real Estate Developers.