The Federation of Businessmen (FPI) has estimated that the number of permitted buildings will be reduced by 100,000 homes this year. due to corona
The Federation of Businessmen (FPI) has estimated that the number of permitted buildings will be reduced by 100,000 homes this year.
Due to the coronavirus, tens of thousands of buildings and houses may not be built this year in France, raising fears of a crisis sustainably, so the need for housing remains strong.
Between March and May, roughly the period of France’s ordered ban to fight the spread of the coronavirus, construction began on 53,900 apartments in France, according to data released by the government on Thursday. This is a drop of 44% compared to the previous year, so it is not surprising that several locations have had to close for weeks, a time for the introduction of sanitary measures.
Worse for the future, councils have largely stopped considering real estate projects. Building permits fell 40% to 65,700 units. It is, therefore, a permanent deficit in new residential construction, which promises to be a worrying trend, because it is necessary to maintain a strong offer to contain the price growth that has been taking place for years in France, especially in several large cities.
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professional pessimists
The issue is even more important that housing represents a large part of household spending, and that it will face an economic recession of historic proportions: -11% this year in France, according to the latest estimates.
Is there still time to catch up on the new apartments? The government has taken steps to ensure permit reviews continue quickly after the detention ends, but experts are pessimistic.
Last month, the Federation of Businessmen (FPI) estimated that the number of permitted buildings would be reduced by 100,000 homes this year. And that doesn’t even include single-family homes, the second pillar of the market.
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The concerns of the sector are numerous since they are related to both supply and demand. In the foreground, the new residential building has been facing a series of situations for almost a year that are detrimental to obtaining the building permit.
There is a first look at the municipal elections with a phenomenon that is systematic, according to experts: mayors are timid when it comes to allowing potentially unpopular projects. It is the virus crisis that not only blocked the verification of building permits, but also extended the election deadline by several months, before the runoff finally takes place at the end of June.
“Then the result is a tough majority, bringing together people who have differences,” Mark Villand, a REIT official, told AFP. It is estimated that “dégagisme” has chosen a series of new teams and that it will probably be difficult to agree on a coherent policy.
On the demand side, home developers and builders regret that the financial authorities maintain restrictions on real estate credit.
loan restrictions
These limits were set at the end of 2019 by the High Council for Financial Stability (HCSF), which includes, among others, the Bank of France and the Ministry of the Economy, due to fears that the growth of real estate loans would eventually lead to difficult situations for households.
in particular, banks were invited to stop accepting commissions greater than a third of household income.
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The real estate sector hoped that the crisis caused by the virus would influence the attitude of the authorities, with the idea of not impeding the recovery of the real estate market after the end of the crisis. But it was not like that. The real estate market is experiencing a “rapid recovery”, as the city council said in June, now these measures are provoking criticism from various players in the housing world.
The financial authorities’ findings have “displaced the deadlock,” Alain Dinin, chief executive of Nexity, a leading French-language advocate, said in a press release. “There is not (…) a rapid real estate recovery”, but “there is a lack of supply, and there is a ‘resolvability’ of demand”, he concluded, announcing it as a permanent decline in new construction.
Date updated: Jul 2, 2020, 05:58
Categories: Optical Illusion
Source: newstars.edu.vn