Is new housing construction at its lowest since 1992?

According to the communist MP for Seine-Saint-Denis, Stéphane Peu, the construction of housing “in all categories” in France is at its lowest “since 1991-1992”.

The improvement in the real estate sector is still awaited and many French people are having difficulty renting or buying a home. Prices and interest rates remain very high. Another worrying indicator: housing construction is struggling.

“In France, we are at a level of housing construction – all categories combined – which is the lowest since 1991/1992, that is to say for 40 years, the date of the last major real estate crisis, said on Sud Radio, Wednesday July 24, the PCF deputy of Seine-Saint-Denis, Stéphane Peu. It’s catastrophic !”

That’s right. According to statistics from the Ministry of Housing, in 2023, there were 287,100 housing units started. And, indeed, France had never built so little since 1992. That year, there were 275,400 construction sites started. The country had entered recession, for the first time since 1975. This slowdown in economic activity was reflected in particular by a high unemployment rate and borrowing rates three times higher than today.

The early 1990s were marked by an economic and real estate crisis, MP Stéphane Peu is right to say. However, he makes a mental calculation error: if the last major crisis actually dates back to 1992, it was 32 years ago and not 40 years ago, as he claims.

This drop in the construction of new housing concerns all types of property. In 2023, house construction starts fell by 23% over one year. For collective housing (such as social housing) and residences (senior, student, etc.), the drop is similar (19.5%).

No region of mainland France is spared. The one that suffers the most is the Centre-Val-de-Loire region with a third less construction between 2022 and 2023.

There are multiple explanations for this housing production crisis. The level of interest rates for borrowing discourages potential buyers. The gradual end of tax advantages for investors, such as Pinel, makes rental projects less profitable. Another obstacle: the cost of construction materials, which has skyrocketed since Covid.

Land is also less plentiful and more expensive. And then, mayors, for their part, tend to issue fewer permits. They must ensure that they comply with the zero net artificialization law (ZAN) to design their local urban planning plan (PLU) and sometimes face opposition from local residents who denounce the concreting of the municipality.