According to the latest figures from the Ministry of Ecological Transition, the production of new real estate is still in a bad way in France. It is even struggling to regain its pre-pandemic levels. In the second quarter, the marketing of new homes thus fell by 11.7% compared to the same period of 2021, a year of catch-up after the confinements of 2020.
The decline in new-build sales is more marked for single-family homes than for apartments. As there are fewer properties for sale, reservations plummet: minus 13%, again over one year. And even less 20% compared to 2019, the last year before the Covid. Over the last quarter, 13.5% of these reservations were canceled, up by more than 3% year-on-year.
The new home market is losing momentum first of all because it is suffering from the explosion in the price of building materials. They had already increased a lot by the time the Covid came out, the war in Ukraine only made things worse.
Faced with soaring costs, manufacturers have no choice but to pass this increase on to their customers as best they can. Added to this is the impact of the new environmental regulations RE2020, for more energy efficiency, which is cutting into their margins a little more, and the difficulty of obtaining building permits in urban areas. As a result, the sale prices of new homes have increased by an average of 5% over one year.
While most builders are still doing well for now, others are throwing in the towel, like Geoxia, the owner of Maisons Phénix, very fashionable in the 1970s for its inexpensive homes. Weakened by the successive effects of the pandemic and the war in Ukraine, the company has recently been placed in receivership.
Reservation cancellations are largely explained by the refusal of mortgages which mainly affect first-time buyers. With the rise in interest rates, more and more files are considered too risky by the banks, which require ever higher contributions. Faced with these complications, many buyers have to give up. There is also the price hike, considered a deterrent by many. At a time when inflation is eating away at budgets, future buyers are being more vigilant and are not hesitating to postpone their purchase plans.
According to the latest savings and investments barometer from the Audirep institute for BPCE, the parent company of the Caisses d’Epargne, only 21% of French people consider the time favorable for a real estate purchase. A level even lower than two years ago, yet in the midst of a health crisis.