New construction in France: the first signs of a rebound after two disastrous years

After two years of sharp decline, the French new construction market finally seems to be showing signs of recovery. According to the latest public data, housing starts, which had reached a low point in May 2025 with only 258.000 units over twelve months, are gradually rising again. August 2025 marked a turning point, with more than 270.000 homes started. This still modest upturn in activity can be attributed to several factors: lower interest rates, reduced inflation, the expansion of the zero-interest loan (PTZ), and the ramp-up of the New National Urban Renewal Program (NPNRU).

Despite this improvement, activity remains significantly lower than pre-crisis levels: housing starts are still 29% below the pre-pandemic period. Nevertheless, this rebound marks the beginning of a new cycle. Real estate retains its status as a safe haven for French households, in a context of ever-increasing structural needs. Population growth, combined with a rise in the trend of people living alone (aging, single people, divorces), continues to generate high demand, estimated at between 250.000 and 450.000 new homes per year, depending on the source.

The non-residential construction market, also in decline since 2022, is beginning to recover. In August 2025, the area under construction increased by 2,0% compared to July, after reaching a historic low of 19,8 million square meters. Certain sectors stand out, notably warehouses (+5,2%), cultural and leisure buildings (+4,9%), and healthcare facilities (+4,1%). The easing of European monetary policy is also creating a more favorable environment for investment, but the recovery remains fragile, hampered by persistent political instability and major international uncertainties.

Structural and regulatory constraints, however, weigh heavily on the sector's prospects. The high cost of materials (still 10 to 20% above 2019 levels), stricter environmental standards (RE 2020, the tertiary sector decree, the ZAN target), and the scarcity of available land are complicating the recovery. Urban regeneration is becoming a priority: land subdivision, brownfield redevelopment, and the conversion of commercial or office areas are now preferred approaches. These more complex and costly operations, however, raise questions about their large-scale economic viability.

In the medium term, the sector's prospects remain contingent on the stabilization of the macroeconomic and political environment. In this uncertain climate, stakeholders will need to adapt to a profound market transformation: reduced land development, increased reuse, growing demand for housing for the elderly, logistics linked to e-commerce, and the evolving office landscape in the face of remote work. More than just a temporary rebound, this represents a lasting reconfiguration of the sector.

Two new studies have just been published.

In October 2025, MSI Reports published two detailed studies on Housing Construction and Non-Residential Building Construction in France.

In these two new studies, MSI Reports analyzes the evolution of the different components of construction in France: housing (detached single-family homes, semi-detached single-family homes, multi-family homes, and residential housing) and non-residential buildings (warehouses, agricultural and forestry operations, industrial buildings, offices, commercial premises, crafts, hotel accommodation, and public service buildings, including education and research, health, culture and leisure, social services, special works, and transport), with a detailed analysis of the situation in 2025. Considering the evolution of the market in recent years, disrupted by the Covid crisis, the war in Ukraine, and a period of high inflation, these studies offer historical monthly data from 2007 to August 2025, forecasts up to 2030, and numerous market segmentations.

These publications are available from €1495 (excluding VAT) for one study and from €2695 (excluding VAT) for both studies (special offer, not available online).

Housing Construction

Construction of Non-Residential Buildings

Illustrative image of the article via Depositphotos.com.