The real estate market faced significant challenges in 2024: the new housing supply reached its lowest level in over 50 years.
Collapse of New Housing Supply
The year 2024 marked a turning point for real estate. According to the Ministry of Territorial Planning, the annual volume of new housing supply fell to 59,014 units, compared to an average of 125,500 from 2017 to 2022. The origins of this decline lie in rising construction costs and interest rates, making home ownership more difficult for households. The real estate market has also suffered due to reduced sales, prompting industry players to curb land acquisitions and halt projects. Pascal Boulanger, president of the Federation of Real Estate Promoters, explains: "the crisis feeds the crisis: due to a lack of sales, we stopped producing new homes, halted buying land, and reduced our workforce".
Uncertain Recovery Prospects
While some hope for gradual recovery this year, industry experts remain cautious. The Federation of Real Estate Promoters notes that it will take two to three years to fully restart the market. This is due to the need to replenish land inventories and rehire skilled workers. With 5,000 professionals having left the sector, restarting production faces tensions on labor costs and available workforce.
Transition Phase for Real Estate Market
Demand concentration in areas such as Paris and the French Riviera is another major hindrance, with these regions accounting for 50.7% of bookings and 47.2% of properties for sale. This dynamic exacerbates the imbalance between supply and demand, leaving many other regions waiting. In this context, 2025 budget measures aimed at stimulating real estate purchases will likely not immediately resolve the crisis. The French real estate market is entering a long and uncertain transition phase. Even if housing production gradually resumes, the available supply will remain significantly below demand for several years.
Without an effective structural recovery plan, the new real estate market may remain strained, leading to lasting effects on prices, property access, and dynamics in major metropolitan areas.
