New housing crisis: 100.000 jobs at risk warns the FFB

The situation in the sector is more than shared. All commissions, committees and working groups have dealt with it and everything is going as announced. In new housing, the crisis has begun.

On a year-on-year basis over three months at the end of February 2023, housing starts fell by 1,1%, of which -8,6% in the individual, while the collective, due to longer lead times, is still in line with small increase of 4,4%. This crisis will intensify, since permits collapse by 26,7%, individual and collective being sucked into the vortex of past sales. Moreover, the latter continue to collapse. Those of individual home builders, after -30,9% in 2022, still stand at -26,6% year-on-year over two months at the end of February 2023; as for those of developers, the acceleration of their fall is clear, with -24,3% year-on-year in the fourth quarter of 2022 and prospects still badly oriented at the end of January 2023. There is also a sharp increase in sales cancellations, without doubt under the effect of the contraction of the credit market, which increases the fall.

With the trend macroeconomic and financial scenario, without institutional change, the fall in new home sales would continue in 2023, with -20% expected, before stabilizing at a low level in 2024. We would then see a collapse in housing starts by 25% between 2022 and 2025, to fall to 274.000 units, as in 1992, the low point of the new housing crisis of the 1990s. The long-term decline in construction activity in new housing would be of the same magnitude , i.e. approximately -25% excluding the price effect.

The new non-residential blows hot and cold. Year-on-year over three months at the end of February 2023, surface areas started fell by 14,5%, penalized by shops and agricultural premises, which lost 7,5% each, but above all by industrial and similar buildings, which gave up 32,8 .7,9%, it is true compared to a very high level a year earlier. On the other hand, the authorized surfaces, that is to say the construction sites of tomorrow and the day after tomorrow, accelerated by 3,7%, all the segments contributing to this movement except the shops (-XNUMX%). Of particular note is the astonishing health of the offices and the acceleration of the administrative buildings.

Under the same assumptions as before and assuming a non-blocking ZAN, by 2025 activity would remain at its 2022 level. by continuing to rehabilitate industrial and storage buildings, and even administrative buildings.

As for the improvement-maintenance activity, it showed a slight decline year-on-year in the fourth quarter of 2022, with +1,8% in volume, of which only +1,4% for energy renovation, against respectively +2,1, 1,8% and +2023% over the whole year. Moreover, the outlook for early XNUMX remains below its long-term average.

By 2025, with the same contextual elements as previously, with no increase in aid excluding inflation and a constrained credit market including in this field, the FFB is adopting a business growth scenario at the same rate as in recent years, i.e. an average of +2% in volume per year.

Overall, building production would fall by 4% in volume between 2022 and 2025. As for employment (employees and FTE temporary workers), nearly 100.000 jobs would be destroyed in the sector by 2024-2025.

FFB proposals to get out of the rut

To mitigate this very real risk today, the FFB can only recall the measures it has been proposing since last year.

First of all, it wants a relaxation of the rules of the High Council for Financial Stability (HCSF) in terms of mortgages, which distributors are currently struggling with, and integration of the rest to live in the decision-making rules. She also wants ZAN to be relaxed, at least in line with what was proposed in the Senate.

Regarding the new housing markets, the FFB first of all makes two requests for accession: the restoration of the new PTZ at 40% in zones B2 and C, as well as the revision of its scales and their subsequent indexation, d 'a part ; the implementation of a RE2020 tax credit on loan annuities, on the other hand. Then, for rental investment, given the collapse of the market, there is an urgent need to redeploy a device at least as powerful as the "Pinel" version 2022. This will allow discussions to be continued more serenely on the status of the private lessor that the federation calls for in the medium term.

Finally, to allow a real acceleration of the ecological transition, the FFB asks that the budget allocated to MaPrimeRénov' be increased by one billion euros each year for five years in order to support the deployment of global renovation, in one go. or in slices. She also wants a fairly radical simplification with the creation of a single application file for MaPrimeRénov' and the CEEs. The FFB also calls for the sustainability of the tax credit in favor of the energy renovation of the premises of VSEs and SMEs, to give visibility to the actors.

The FFB supported these measures within the framework of the CNR Logement. The FFB is delighted to see certain references to it in the documents of the working groups, in particular the status of the private lessor. On the other hand, the FFB admits to being very worried about other proposals, such as the abandonment of any national quantified objective for the construction of housing. Without this objective, how can aid be calibrated? How to plan a program, in particular in terms of social housing? If local authorities set objectives alone, how can national cohesion be guaranteed? What about the treatment of territorial fractures?

The measures that the FFB is asking for certainly have a cost and the federation is not unaware of the tense context of public finances. But precisely, when the very official Housing Account shows that in net balance, housing contributes more than 50 billion to the Nation's budget, a historic level, care must be taken not to kill the goose that lays the golden egg !

Especially since the decline in building costs and prices observed since the summer is a thing of the past. In fact, the materials whose prices had risen the fastest from the end of 2020 to July/August 2022 have been in rapid decline since then. But the energy crisis has passed by and tiles, ceramic products, glass, cement products, etc. accelerate significantly at the start of 2023. For example, according to INSEE data, ready-mixed concrete (BPE) posted +17,2% over the first two months of the year.

The BT indices, representative of building costs, are therefore recovering again. And this will continue due to wage increases in the building sector, in a context of high inflation which is expected to remain above 5% in 2023. A big question then arises: will customers be able to follow, without additional support? Which refers to the proposals of the FFB.