The number of building permits continues to fall in France

The new real estate crisis is getting worse. The number of building permits continued to fall in September, with 371,300 new housing units authorized in 12 months, an annual drop of 28.3%, according to provisional figures revealed by the Ministry of Ecological Transition on Friday October 27. Since a record level reached in August 2022, due to regulatory deadlines, the number of permits issued each month has stabilized at a low level, inexorably reducing the annual total.

The estimated number of construction sites started, which traditionally follows that of permits by a few months, is also eroding significantly, with 315,800 construction starts over 12 months, a drop of 16.6%. The drop in authorizations concerns all types of housing, pure individual (-31.8%), grouped individual including subdivisions (-27.6%), and collective (-28.3%). Residences (students, seniors, etc.) suffer a little less (-19.7%).

A slowing real estate market

New real estate is experiencing both a sharp drop in buyers’ purchasing power and an increase in construction costs. The rapid rise in interest rates has excluded many buyers from the market, particularly first-time home buyers, whose income is also being eroded by inflation.

On the side of developers and builders, successive global crises (pandemic, war in Ukraine, etc.) have caused the costs of construction materials to soar, and the tightening of environmental regulations on new projects adds further additional costs to operations. . Developers also point out the reluctance of mayors to grant permits, under pressure from administrators reluctant to accept new construction.