France is affected by the real estate crisis. The condition of the construction sector is not the best. The sector federation warns that two-thirds of construction companies expect 2024 to be worse than 2023. This risks negative effects on the economy as a whole.
Building professionals are almost unanimous in recognizing the tough times the sector is going through. The year 2023, marked by inflation and rising lending rates, was the most disruptive for the building sector, further impacted by the removal of the 6% VAT for sales of demolition-reconstruction projects. The outlook shows no improvement for 2024.
Two-thirds of construction companies predict a worse year in 2024 than in 2023, according to Mbuild, the sector federation. Experts including Fanny Guinochet are calling for a situation that risks affecting all sectors, directly or indirectly, in the long run and therefore “whole economy”.
When the building doesn’t work…
“When the building goes, everything goes”… Except there, the building is wrong! And anxiety weighs heavily on the rest. This starts with companies going out of business. This directly reduces tax revenue, but also layoffs, and thus job losses, therefore sources of income for families, reduced purchasing power, reduced consumption, increased unemployment, etc. The process of infection, explained by Fanny Guinochet FranceinfoMust have been engaged already then?
The real estate crisis will worsen
Indeed, real estate, as already affected by inflation and high borrowing rates, then finds itself even more affected as it is directly linked. And those involved are expected to suffer the same consequences. The French have been handicapped by 25% purchasing power in the last two years.
The owners are no better off. New standards revised or newly imposed in the name of energy transition, such as DPE (Energy Performance Diagnosis) for rentals, have also affected a number of real estate programs. Agencies are not spared, and neither are field personnel. Like direct partners “Notaries, Brokers, Promoters and Entrepreneurs” Suffer in the wake of the crisis and its consequences.
Beware of Real Estate Crisis Generalizations!
Experts warn of real estate crisis contagion that can spread quickly given the impact real estate has on society in general. “Real Estate” are synonyms “Decreasing geographic mobility”, Consequently “Reduces chances of reducing unemployment”. “Position also affects birth rates.”
In such a context, “Ownership becomes an unattainable horizon”And “Confidence in the future is affected, and this fuels anger. So housing is a very important issue, a lever in the economy”Fanny Guinochet explains what calls for “The government is reviewing the issue.”
