Have real estate developers finally eaten their black bread? The figures for new housing production and sales in 2024 are disastrous, if not surprising. They reflect a major error on the part of the French government, which believed that supply and demand alone would be enough to bring prices down and restore purchasing power to the French.
The reality is that developers have withdrawn from the market, unable to significantly readjust their exit prices against a backdrop of land scarcity, Malthusianism on the part of local elected representatives and tightening standards. No one is bound to do the impossible.
If we want to see the glass as half full, professionals have some hope in the Finance Bill for 2025 and a number of measures that open up a window of opportunity to bring households back into the sales bubble. Extension of the zero-rate loan. Temporary exemption of gifts for the purchase of new multi-family housing. Opening of the LLI scheme to private individuals.
This is not a window that needs to be opened, but a double door that needs to be opened to bring investors - both private and institutional - back into residential property on a massive scale.
Why? Because the crisis is unprecedented. It's not just a question of saving the real estate players, but rather of housing the French and filling the state coffers. Demand has disappeared, but the need is there. So the time has come to make up for past mistakes. And to do that, we need to produce!
The British Labour government, which came to power in July, has announced a vast construction program billed as the biggest since the Second World War. Over 100 sites across England have been identified for these "new towns", each with the potential to create "at least 10,000 homes". Prime Minister Keir Starmer's aim is to build 1.5 million homes by 2030. And to offset "a decade of decline in housing construction".
While we wait for such political will in France, we could put our trust in citizens. But how? For example, by finally deciding to create a status for private landlords worthy of the name. As long as it's sustainable, clear and covers both new and old housing, and perhaps even all real estate. This would enable us to move away from the mortifying image of rent and realize that real estate is a productive investment.