Rising interest rates, falling property prices, property shortages, housing crises… In recent years, the real estate market has undergone major transformations. In 2024, we are witnessing a crisis in the real estate and construction sector throughout France. So what are the impacts and challenges of this crisis on companies in the sector?
Real estate crisis 2024: where do we stand?
In 2023, the real estate market was marked by sharply rising interest rates, rising from less than 1% to more than 4% in the space of 18 months, according to Meilleurtaux.com, which has led to a decline in transactions and property prices. At the moment, in the 2nd quarter of 2024, France is experiencing a significant housing crisis. Indeed, at the end of 2023, there was a -36% drop in rentals over two years (Source: SeLoger), in particular following the increase in credit rates, regulations related to the DPE (energy performance diagnosis) and the increase in rents (+3.5% in 2023).
According to the Union Sociale pour l’Habitat (USH), 518,000 housing units would have to be built or put back on the market per year by 2040 to meet the needs of the population.
However, the market is also marked by a historic construction crisis. This is mainly due to inflation and the geopolitical situation, which have contributed to significantly increasing the costs of labour, materials and energy.
The CCI (Construction Cost Index), which measures the evolution of the prices of new residential buildings, stood at 1,600 points 10 years ago: it now stands at more than 2,100 points.
In addition to the economic slowdown, other factors are contributing to this construction crisis, such as the decline in demand for housing, the tightening of urban planning regulations and building standards, the scarcity of building land, etc.
Real estate crisis 2024: the impacts and challenges for professionals
Faced with this crisis, many developers are unable to complete and sell projects initiated and find themselves facing major financial difficulties. We can indeed see A 41.2% decrease in new housing put up for sale in the first quarter of 2024 compared to last year, with 11,656 homes sold. Property sales times have also increased significantly throughout France and sales to investors have fallen by 39.9% compared to last year.
The FPI (Federation of Real Estate Developers) believes that this crisis is likely to continue for the rest of 2024, if not beyond.
Faced with such a situation, many major players in real estate development such as Nexity, Vinci and Bouygues Immobilier have been forced to set up PSE (Employment Protection Plans). According to the FPI , 300,000 jobs would be eliminated by 2025, including 150,000 in the construction industry.
Real estate professionals: how to manage this period of crisis?
To help you limit the impact of this crisis and preserve the sustainability of your real estate business, the interim manager is a powerful ally.
At WAYDEN, we are able to identify and assign, in the shortest possible time, an interim manager who is an expert in crisis management and a real estate specialist. After qualifying your needs and your problem, we select, from our large pool of experienced consultants, an interim manager whose expertise and interpersonal skills match your expectations. With With a career spanning career of more than 15 years and a long experience with major players in the real estate industry, he will be a major asset in times of crisis.
Operational immediately and equipped with a neutral external perspective, the latter will be able to quickly identify your challenges, make strong decisions if necessary, and deploy the necessary solutions to minimize the consequences of the crisis, safeguard jobs and ensure the survival of your business.
