The new real estate sector is suffering. Sales are in free fall with almost 40% drop in new housing reserved but prices are not falling, according to the real estate laboratory.
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It’s quite dizzying, this 40% drop is that of the number of new programs undertaken since the start of the year, according to the real estate laboratory which is publishing the ninth edition of its property price barometer. new real estate. And again, it’s an average, in Auvergne, for example, the drop is 57% and it’s almost as much in Gironde.
Several reasons for this decline: firstly an explosion in the costs of raw materials, between 20 and 25% increase due to inflation. Everything is more expensive: aluminum, steel, but also energy, or even salaries with the increase in the minimum wage. Then, added to inflation, thermal regulations, to insulate homes, are increasingly restrictive. Professionals estimate that these additional standards increase their costs by another 5%. Promoters are cutting their margins and increasing discounts to try to attract customers. For example, they offer you the brokerage fees or the equipped kitchen, this is a sign that they are having trouble selling.
Yet for buyers, property prices aren’t really falling. They fall especially in old buildings, but not in new buildings because, precisely, the costs of new buildings remain high, and difficult to reduce. Not to mention that the more developers build, the more they pool and manage to smooth their prices. However, they are no longer able to do this at the moment, since they are launching fewer construction programs.
High rates remain a barrier for households and developers
Interest rates remain high and this slows down purchases; households still have great difficulty obtaining credit. In addition, this contraction in financing has repercussions on the promoters themselves. Banks are asking them for much more guarantees than before. For example, they must now have pre-sold at least 50% of the housing to have a loan whereas a few years ago, it was enough for them to have 30% of property reserved to have a loan. It’s a bit like the snake biting its tail: as promoters have more difficulty financing themselves, they have less cash flow to launch new projects. More and more big names like Netixy and Quartus are downsizing and laying off workers.
The year 2024 risks still being very complicated. This is not very good news when there is already a shortage of hundreds of thousands of homes in France. As for the renovations, even if they are supported by the government, they will not be enough to compensate.