the number of building permits issued drops further in 2023

“Nothing is happening, nothing, nothing… We’ve hit rock bottom,” deplores Friday October 27 the president of the Federation of Real Estate Developers, Pascal Boulanger. New real estate is experiencing both the sharp decline in buyers’ purchasing power and an increase in construction costs.

We are in the heart of the crisis and rising interest rates are making the situation worse. The monetary policy carried out for several months by central banks – including the ECB – to fight inflation has, paradoxically, excluded many households from the market, particularly first-time home buyers. It is in fact increasingly difficult to obtain a loan from banks and households are being careful in the face of threatened purchasing power. To which must be added the various international crises which have caused the cost of raw materials and construction materials to soar, not to mention the tightening of environmental regulations on new projects which adds additional costs.

Government statistics put the number of new homes authorized at 371,000 between October 2022 and September this year, a drop of 28% year-on-year. Since August 2022, the number of building permits issued has stabilized at the very low level of 30,000 per month, which mathematically leads to a drop in construction site openings.

All types of construction are concerned

Construction sites for individual houses have never been so few since 2000. The fall concerns all types of housing: -32% in individual homes for (houses); -28% for what we call grouped individual (subdivisions); the same for collective buildings. 150,000 jobs could be destroyed in real estate by 2025. Building professionals are up in arms against the President of the European Central Bank, Christine Lagarde. They consider themselves, along with households, to be collateral victims of the policy of raising interest rates intended to combat inflation. The crisis feeds the crisis, in a way.