Global Impact Barometer of the City's Industry in France

Nine years ago, EY and the Palladio Foundation launched the only comprehensive impact study of the real estate and urban sectors, the largest economic sector in France. Beyond persistent economic tensions and the ecological transformation that is essential for everyone, this 2025 edition focuses on an often-overlooked perspective: the sector's societal commitments, making the city a habitable, liveable, and inclusive space.

For the year 2025, the main results are as follows:

ECONOMIC IMPACT: Between a slowdown in activity and a contraction in investments, the sector is suffering from an intensifying economic crisis.

Evolution: Real estate remains the leading French industrial sector (10,2% of French GDP), but its added value fell in 2024 (-1,2% vs. 2023) even though French GDP increased by 1,1%. Real estate development appears to be the most struggling segment (-13%).
Bankruptcies: in 2024, the sector experienced a record number of business bankruptcies (+21% in secondary works to +150% in real estate development in 1 year[1]).
Asset classes: serviced residences and healthcare real estate benefit from high levels of confidence (64% and 56%), while offices (19%, -10 pts vs. 2023), new housing (21%) and public facilities (28%) are struggling to reassure.
AI: The use of AI in construction is certainly less widespread than in other industrial sectors, but it has surged in real estate services activities (engineering, architecture, marketing, etc.). “Proptech” players raised around €3 billion in Europe in 2024[2].

SOCIAL IMPACT: France's largest employer faces a decline in its workforce

Employment: The sector, which is inherently non-relocatable, employed 2,4 million French people in 2024 across the country. However, the workforce decreased by 1,3% between 2023 and 2024, with a more sustained decline in real estate development (-5,1%) and marketing (-3,5%). However, Q1 2025 suggests an improvement.

Recruitment: Executives, whose confidence level has never been lower, are stabilizing or reducing their workforce (only 58% intend to recruit in three years vs. 67% in 2024). Senior employees face the least promising prospects.
Parity: women occupy 44% of management positions, a high rate compared to their representation in the sector (25%).

ENVIRONMENTAL IMPACT: at the forefront of the ecological transition, the sector remains on course for decarbonization

Trajectory: Despite the challenging economic climate, the sector remains on track for decarbonization: 57% of companies have already defined their trajectory for 2024 (+7 points vs. 2023). Public and private climate investments continue to increase in the construction sector.
Carbon: after an acceleration between 2021 and 2023 (-22%), the decline in greenhouse gas emissions linked to the use of buildings is stagnating this year (-1%)[3]. Many stakeholders are expressing concern about their ability to achieve the SNBC 3 objectives (target of 48 Mt eqCO2 / year vs. 57,8 Mt eqCO2 emitted in 2024).
Energy consumption: while the sector accounts for 44% of total energy consumption in France, energy renovation is a central lever of the transition. Housing renovations are increasingly numerous (+28% of renovations supported between 2017 and 2021), for energy gains reaching +96%[4]. Since the implementation of the tertiary decree, energy intensity has fallen by almost 20% in tertiary assets (health, offices, shops, education, etc.), mainly between 2019 and 2020, then stagnating between 2020 and 2022 (+2,1%)[5].
Adaptation: in a sector on the front line facing the intensification of climatic hazards, home insurance premiums for natural disasters have increased by +12% to +20% for 2025. 55% of companies have implemented a building adaptation plan and 40% of private owners believe they will have to carry out work in the coming years to strengthen the resilience of their homes[6].

SOCIETAL IMPACT: a sector involved in the daily lives of the French, around 3 major priorities, including housing at the top

The Habitable City:
- The number of authorized housing units in France will continue to decline in 2024 (-12% compared to 2023), even though the need is still growing. 55% of executives rank access to suitable and affordable housing for all among their top three priorities.
- While 9 out of 10 French people say they are satisfied with their housing[7], access to rental accommodation is becoming more complex and 4,2 million people are in a situation of poor housing. This trend is accentuated by the breakdown of family units and the aging of the population (27% over 65 in 2050, compared to 20% in 2020 according to INSEE demographic scenarios), which increases the need for housing. Faced with this aging, the supply of suitable medical accommodation remains insufficient.
The Livable City: According to leaders and our assessment, French cities present contrasting dynamics, while their "promise" is to create dynamic and peaceful living environments. The commercial vacancy rate in city centers is increasing in France for the second consecutive year (9,7% in 2023 to 10,9% in 2024)[8].
The Inclusive City: It is in rural communities that the French maintain good relations with their neighbors (33% vs. 17% in the Paris region), but also where access to public services remains the most difficult. The inclusion of disadvantaged groups remains a priority for the managers surveyed, and a third of companies implement equal opportunity initiatives.