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Occitanie: “We have all the ingredients for a good real estate crisis”, a promoter is sounding the alarm

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Occitanie: “We have all the ingredients for a good real estate crisis”, a promoter is sounding the alarm
Written by madishthestylebar

Laurent Villaret, president of the Federation of property developers (FPI) Occitanie-Méditerranée is worried to see the fall in the new housing market. But foresees the end of the tunnel at the end of 2023. He asks that the State legislate to facilitate the constructions.

Real estate developers have the blues. The situation is deteriorating and Laurent Villaret, president of the Federation of real estate developers (FPI) Occitanie-Méditerranée is alternately alarmist then optimistic.

Alarmist first because “we are seeing a dizzying drop in sales in 2022. This is the receptacle year for the past 4 years”, he regrets. Four years marked by the health crisis, the war in Ukraine and the rise in the price of materials, the increase in environmental constraints… “the cost of construction is 10 to 20% more expensive than in 2019”. If we add to this the slowdown in sales reservations, “you have, all cumulated, all the ingredients of a good real estate crisis”.

An “impossible” price drop

And there is no question, in this context, of seeing the selling price of housing fall. The promoter affirms it without ambiguity “Any reduction is impossible because of the increase in costs. As for lowering our margins, it is not possible because the banks only lend us money with margins between 6 and 8%”. Without this margin, no financing!

On top of this gloomy observation comes the rise in interest rates and usury rates which prevent many households from being able to borrow. In short, the situation is becoming considerably tighter for the real estate market, particularly in the sectors in tension. Prices soar in the conurbations of Montpellier, Nîmes, Sète, Narbonne or Perpignan.

“The State must legislate”

To face up to his difficulties, Laurent Villaret asks “the State to legislate, to facilitate construction. Only 80,000 housing units are built per year when the need is 400,000”. It even offers several avenues of reflection such as the reversal of a “real estate VAT” for local authorities in order to compensate for reductions in allocations and the abandonment of the housing tax on the one hand and, on the other hand “to support the obligation for municipalities to build social housing in order to avoid penalties”, notes the vice-president of the FPI Philippe-Antoine Brouillard.

The federation also proposes to create free land offices (OFL) for private construction, on the model of the Solidarity Land Offices (OFS) for social housing in areas in tension. There are 70 of them nationwide. The promoters could be associated with the banks in these OFLs and allow “Discuss with elected officials to find levers and build cheaper, avoid certain aberrations”. Like the construction of parking for each building when a parking silo could be used for several buildings: “We have lots of ideas, we only ask to be able to discuss them”claims Laurent Villaret.

A fair balance

And in the former Languedoc-Roussillon region, sales are also in free fall: – 18% compared to the same period in 2021. Listings are also down by -10% in the region, up to at -39% in the metropolis of Montpellier: “Béziers is an exception with 504 homes put on the market (+161%) and pulls the region up“, continues Laurent Villaret. Who shares a renewed optimism: “The metropolis of Montpellier has just launched a program of 8,000 housing units. The elected officials of the intermunicipalities of Nîmes and Béziers have done the job and we can think that a reversal of the supply is possible for the end of 2023 at the beginning of 2024”.

Because the promoters assure him: “Montpellier cannot absorb everything. The markets of Nîmes, Béziers, Sète, Narbonne and Perpignan are essential to establish a fair balance”. What to see on the Mediterranean sector of Occitania “this period of crisis with a little more serenity”.

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