New Home Sales Plummet : What’s Behind The Construction Collapse ?

The new real estate market has entered an unprecedented slowdown spiral. While access to property remains a priority for many households, the production of new housing is at its lowest level in over 50 years. In 2024, only 59,000 new homes were put up for sale, a decrease of 50 % compared to 2022. Thus, this crisis, much deeper than a simple cyclical slowdown, is the result of a chain of structural and economic factors. Rising construction costs, increasingly difficult financing, withdrawal of institutional investors: all elements that hinder a rapid recovery.

An unprecedented collapse of the supply of new housing

The year 2024 marks a turning point for new real estate . According to data from the Ministry of Territorial Planning, the annual volume of homes put up for sale has dropped to 59,014 units, compared to an average of 125,500 per year between 2017 and 2022. A collapse whose origin lies in several factors, foremost among them the surge in construction costs and rising interest rates. These factors have made home ownership more difficult for households, drastically curbing demand.

The real estate promotion market has also been hit hard. Due to a lack of sales, industry players have reduced their land acquisitions and halted many projects. Pascal Boulanger, president of the Federation of Real Estate Promoters, summarizes the situation: “the crisis has fed the crisis: due to a lack of sales, we haven’t produced new homes, we’ve stopped buying land and reduced our workforce”. The direct consequence is a drastic reduction in the stock of new projects, with repercussions across the entire sector, from employment to construction timelines.

Uncertain recovery prospects and a strained market

While some hope for a gradual rebound this year, industry experts are more cautious. The Federation of Real Estate Promoters specifies that “it will take between two and three years to get the machine running again”. This late recovery can be explained by several factors, notably the need to rehire qualified staff and rebuild land inventories. With 5,000 professionals having left the sector, restarting production will not happen without tensions on labor costs and workforce availability.

Another major hindrance: the concentration of demand in certain areas. Paris, the French Riviera, and border regions with Switzerland today account for 50.7 % of bookings and 47.2 % of properties for sale. This dynamic further exacerbates the imbalance between supply and demand, leaving many other regions in a state of waiting. In this context, the budget measures of 2025, intended to stimulate real estate purchases, will likely not be enough to immediately stop the crisis.

The French real estate market is thus entering a long and uncertain transition phase. If housing production gradually resumes, the available supply will remain significantly below demand for several more years. Without a genuine structural recovery plan, new real estate risks remaining under strain, with lasting consequences on prices, access to property, and the dynamics of major metropolitan areas.