Despite the resumption of building permits in 2025, the production of new housing remains sluggish.

According to the first estimate published Friday by the Ministry of Urban Affairs and Housing, 379.222 homes obtained a building permit in 2025, while 274.611 homes were actually started across the country.

Despite this recovery, production levels remain significantly lower than before the crisis. Over the previous five years, the decline reached 8,8% for building permits and 21,3% for housing starts, illustrating the extent of the accumulated backlog in housing construction in France.

This slight improvement is certainly "good news" for economist Pierre Madec, a housing specialist at the French Economic Observatory (OFCE), but it is not enough to stop the shortage.
"Since the beginning of 2022, there are several hundred thousand homes that we have not built and that are lacking," he points out.

A structural crisis in new construction

For almost three years, the construction of new housing has been going through a deep crisis, fueled by rising construction costs, the rapid increase in interest rates — which has slowed down many homeownership projects — and the gradual end of support mechanisms for rental investment.

Faced with a crisis affecting the entire housing sector, the government announced last week a plan described as "ambitious", with a stated objective of 400.000 new homes built per year.

"This isn't an excessive ambition, it's simply an ambition to return to normal," emphasizes Pierre Madec, noting that this volume of "400.000 housing units corresponds to the historical average of the last 20 years." The economist nevertheless observes "a shift in the government's approach" after more than a decade marked by the absence of any real measures to stimulate construction.

While building permits issued in 2025 appear to be approaching the government's target, construction starts remain far below, according to this still partial data.

"We don't want to jeopardize the future, so developers are submitting building permits for a possible resumption of activity, but we haven't increased the number of housing units put on the market," explains Pascal Boulanger, president of the French Federation of Real Estate Developers (FPI). He had already warned of a historically low level of housing units put on the market between July and September 2025.

For Bernard Coloos, a member of the housing group at the Terra Nova think tank, "building 130.000 more homes is a considerable effort," which will require time, strong mobilization from the sector, and increased commitment from local elected officials.

"Positive signal" from the government

Among the stimulus measures, the government has included in the draft budget for 2026 a new rental investment scheme, intended to replace the Pinel scheme and likely to be named after the Minister of Housing, Vincent Jeanbrun.

This new mechanism is based on a "private landlord status," presented as an improved version of the initial budget proposal. It aims to encourage individuals to invest in rental housing through targeted tax benefits.

According to Vincent Jeanbrun, this scheme should "allow for the construction of nearly 50.000 additional homes per year" and generate more than 500 million euros in tax revenue, even though its long-term cost has not yet been assessed.

"The real recovery will come thanks to the private landlord status," believes Pascal Boulanger. Sales to investors would constitute a "trigger to launch the construction of buildings," which is often stalled until the 50% threshold for sold housing units is reached.

Bernard Coloos shares this cautious optimism: "the status of the private landlord is undeniably positive for new construction" and he anticipates "feeling its effects in the construction starts next year", even if the presidential election could slow down the momentum.

The "signal is positive" for Pierre Madec as well. "Among the good points is the linking of tax benefits to rent ceilings." On the other hand, the uniform application of the scheme across the entire country raises questions: "the targeting could have been better," he summarizes.

"I am not sure that this mechanism will be sufficient, even if we meet the target of 50.000 homes for investors, to have 400.000 homes started," the economist concluded.

Illustrative image of the article via Depositphotos.com.