The fall in building permits in real estate continues. The latest data for July are not positive.
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According to the statistical services of the Ministry of Ecological Transition, between July 2023 and July 2024, 348,000 housing construction permits were issued, a decrease of 15.5%. This translates into 63,000 fewer permits over one year. The most significant drop in permits concerns single-family homes (24% fewer permits issued compared to July 2023). This is followed by collective housing (buildings): -15%.
The damage is rather limited in terms of residential housing (students and seniors), the drop is limited to 6%, but it does exist despite the crying need for housing, particularly for students.
The situation is particularly tense in three regions: Ile-de-France, Centre-Val de Loire and Auvergne-Rhône-Alpes, where there has been a drop in the issuing of building permits of almost a quarter (23% over one year, to be precise). Two are doing better: Hauts-de-France (-1.4%) and Brittany (-5%). The third largest land-consuming region, Brittany is particularly affected by the ZAN (Zero Net Artificialisation) law of 2023, which is making building land scarce, with the aim of completely stopping this artificialisation of soils by 2050. All municipalities are affected by this law, to varying degrees, but this law alone does not explain the difficulties in the sector. The crisis in new construction lies elsewhere.
Two main factors explain the current crisis in new real estate: construction costs with the soaring price of raw materials, even if this inflation is calming down, and increasingly strict environmental standards which are also prohibitively expensive, despite public aid. And then, the other problem is the drop in construction starts which automatically follows that of building permits, with serious consequences for employment. According to the French Building Federation, 150,000 jobs are expected to be lost in the sector in France by next year. Which continues to place the issue of real estate and housing at the heart of the political challenges for the future government team.