Property. The new housing market: will the situation improve in 2024?

A sharp drop in housing starts, the number of building permits… According to data from the French Building Federation (FFB), new construction is falling into crisis at the end of the year. And the situation will get even worse in 2024…

Decrease in production by -7.8%

With 286,000 construction starts in 2023 (-22.3% in one year), the volume of new housing production, which represents roughly 27% of construction firm activity, is down to -7.8%, the all-time low of 1992. -1993 (at 275,000 units). According to the FFB, this is accompanied by a 24% drop in the number of building permits.

“All territories, from metropolises to rural areas, all types of housing, individual and collective, social and private, are falling into crisis,” he suggests.

Only improvement-maintenance grows

Improvement-maintenance, which accounts for 54% of activity, is the only segment to see real growth (+2.6%), mainly due to energy renovation, which is up +3% in volume. This is driven by non-residential premises (offices, administrative buildings, etc.) with +4.1%, although activity in the housing sector will accelerate to +2.6% with confirmed dynamics MaPrimeRénov’ equipment.

In the housing sector, non-energy work activity increased by 2.3%.

2024: recession expected

According to the FFB, the deterioration of the overall situation will continue in 2024, especially with a slowdown in growth to +0.4% in volume. “However, a gradual decline in inflation would allow the credit market to ease slightly, but too little and too late to affect the movement. In addition, it would be more than compensated by the reduction of support measures for new housing,” emphasizes the FFB.

A new house will no longer be eligible for a zero-rate loan (PTZ) from 1ahem January 2024 and the Pinel Leasehold Investment Scheme will end on December 31, 2024.

In this context, taking into account the trends in sales and housing permits in 2023, housing starts are expected to fall a further 16% in 2024, while building permits would lose 12% in relation to the drop in sales. This would lead to a decrease in the volume of new housing activity by 21.3%.

According to the FFB, improvement-maintenance should see a slight decline with activity growth limited to 1.6%, mainly due to a relatively gradual increase MaPrimeAdapt’ and the “MaPrimeRénov system” very oriented towards global renovation, which is trying to find its audience. »

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