In the third quarter of 2024, marketings of new homes fell by 41% compared to the same quarter last year.
The supply of new housing continues to dry up and the end of the crisis does not seem to be imminent. Sales of new homes in the 3rd quarter of 2024 fell by 41% compared to the same period last year, according to the Federation of Real Estate Developers (FPI).
With 8,693 homes put on the market in Q3, the sector reached its lowest level in almost 25 years. “We didn’t expect that,” declared FPI president Pascal Boulanger during a press conference this Thursday, November 14. “We are halfway through the worst quarter we have ever had.”
And the situation is not likely to improve since building permit authorizations also fall, by 7.6% compared to the 3rd quarter of 2023. 85,000 housing units were authorized, while the average was more than 110,000 between 2015 and 2018.
More and more housing is even being withdrawn from the market due to failure to find a buyer. The withdrawal rate of marketed housing is progressing inexorably to reach a high of 32%. Thus during the quarter, the marketing of a third of housing was suspended or stopped, compared to 8% at the end of 2022.
“We are preparing for the shortage”
According to Pascal Boulanger, a withdrawal rate of between 3 and 8% corresponds to technical or legal problems encountered by promoters. Thus, according to him, the 25% of housing removed is for commercial reasons.
As the municipal elections approach, the situation is unlikely to improve according to the president of the developers' federation. “We are preparing for the shortage of 2027, 2028…”, worries Pascal Boulanger.
“The problem is that when the recovery is here, we will not be able to respond to it,” he warns.
On the demand side, the situation is not improving, but the decline is slowing down. Sales of new homes only fell by 2.5% in the 3rd quarter of 2024. It thus stabilized at a particularly low level around 19,000 reservations, compared to 28,000 on average between 2018 and 2024.
But here again, the president of the promoters' federation is worried about the future. “We can imagine that the last Pinel buyers rushed, but with the end of the system, sales risk falling further,” he explains.
Stable prices
Finally, on the price side, the drop observed is very slight compared to the market collapse. The price per square meter reached 4,904 euros in the 3rd quarter of 2024 compared to 4,969 euros a year ago.
“It’s a technical price which includes the cost of construction, land, standards… Our prices cannot really go down,” assures Pascal Boulanger.
However, he specifies that these prices are recorded excluding discounts granted by promoters, which have increased in recent months.
According to the president of the FPI, in this context, developers are becoming poorer in terms of land and labor. “But the day the market starts again, we risk having a bidding war for land because everyone will want it and inflation in salaries because it will be difficult to hire,” he warns. He is now banking on measures in the finance bill, such as the generalization of zero-interest loans, in order to stop the bleeding.
