Despite repeated warnings from developers, the government is letting the new housing market collapse

All indicators in the new housing sector are red

Supply and demand are in free fall: in the second half of 2023, listings for sale drop sharply (-28,8%), as do sales (-30,8%).

If the drop in sales over three months seems to be stabilizing (-34,63% in Q1 2023 and -30,2% in Q2 2023), that of sales is accelerating (-24,8% in Q1 2023 and - 37,9% in Q2 2023).

This result confirms the observation highlighted during the previous FPI press conference: no longer finding buyers, more and more promoters are abandoning operations.

The rise in construction costs, then the continued rise in rates, are gradually desolving households: buyers and individual investors have deserted the sales offices. Total sales fell again, for the second year in a row. The number of homes sold stood, over the entire half-year, at 46.448 homes, a level lower than that of the first half of 2020 (58.697 homes), at the height of the Covid crisis.

For Pascal Boulanger, President of FPI France: “While our fellow citizens are struggling to find housing, like students who are going through a real ordeal to find accommodation, the passivity of public authorities accentuates the drying up of the new supply, necessary for the fluidity of the residential journey. If nothing is done, nearly 80.000 homes will be missing this year. 4 billion euros less tax revenue for the State, 300.000 fewer jobs in 2024 and 2025, a labor market that is becoming sclerotic... a death spiral has begun. Concrete and robust measures with immediate effect are vital for the French. »

An illusory prospect of basing the new rental offer solely on institutional investors

As the crisis takes hold and the need for housing is dire, wanting to rely on the production of rental housing solely on institutional investors is pure illusion. The numbers speak for themselves. Whether the source comes from the FPI Observatory or the IGF (General Inspectorate of Finance), net sales to individual investors of housing eligible for the Pinel rental investment tax assistance system were of the order of 50.000 to 60.000 on annual average between 2015 and 2022.

For comparison, block sales by developers to institutional investors are on an annual average over the same period of around 6.000 homes.

The comparison is clear. Furthermore, subject like all investors to the vagaries of interest rates, institutional investors are not in a position to fully take over from individual investors.

For Pascal Boulanger, President of FPI France: “As mayor of a city that he has revitalized, the new Minister Patrice Vergriete knows that housing is one of the primary levers of land use planning and deserves as much attention as the reindustrialization policy. This is unfortunately not the case at present. We cannot base the production of rental housing solely on the use of SCPIs, even though collection has stalled since the start of the year and many French people see rental investment as a means of ensuring , in particular, a retirement supplement and the satisfaction of being able to house households. Our proposals are on the table. We call on the government and parliamentarians to finally take action. »

Illustrative image of the article via Depositphotos.com.