The number of new homes listed for sale fell in the third quarter. Which weakens the entire promotional sector.
New property numbers are “disastrous”, Federation of Property Developers (FPI) president Pascal Boulanger warned on Thursday, and some developers are starting to cut jobs.
“We’re losing employees and we’re losing know-how,” panicked Pascal Boulanger at a press conference. “I’ve heard about the beginnings of PSEs (Employment Protection Plans, Editor’s Note),” he warned, adding that “nobody replaces those who leave” in retirement.
There is a “loss of know-how, and this is becoming very worrying, I see many operational managers, operational fitters changing jobs,” added Pascal Boulanger. He did not name the affected developers or give figures on job losses, but recalled that according to estimates by employers’ organizations, 300,000 jobs were at risk by 2025 – half in the construction industry, half in related professions (developers, architects, insurance companies, etc.).
50% drop in bookings
2023 should see a drop of “around 50%” in new home bookings and sales, Pascal Boulanger has feared. New home sales fell 48.6% in the third quarter and individual bookings fell 46.6%, according to the FPI Observatory. Just under 12,000 homes were listed for sale in the third quarter. “This is the worst quarter since the observatory was founded,” lamented FPI General Delegate Didier Bellier-Ganière.
According to statistics from the Ministry of Ecological Transformation, sales fell by 34.9% and individual bookings by 39.7%. If the current trend continues, bookings should be around 90,000 in 2023, compared to 160,000 in a “normal” year, warned Didier Bellier-Ganière.
Worrying price situation
The state-supported buyback programs through the Caisse des Dépôts and Action Logement are not enough to compensate for the drop in private bookings and are also putting developers in trouble, confirmed Pascal Boulanger, because “we are doing these block sales with zero margin, or even negative margin for most of them . In terms of individuals, sales to investors fell by more than half and sales to owner-occupiers fell by 36.5%. The FPI talks about “paralysis in the housing trajectory of households”.
It is on the price side that we now see how worrying the situation is for developers. They certainly continue to increase within a year, but from one quarter to the next, the development changes. Nationally, the increase is only 1.3%. In Ile-de-France, the quarter-on-quarter decrease is 5.2%. In order to convince the banks to finance their projects and thus achieve a sufficient share of reservations, the promoters implement promotional offers right from the start of operations. FPI therefore believes that new housing prices are now on a downward trend. For new players, these are incompressible costs, the risk burdens the margins of companies and therefore, in the medium term, their financial health and existence.