{"id":47125,"date":"2025-11-30T20:00:00","date_gmt":"2025-11-30T19:00:00","guid":{"rendered":"https:\/\/www.11onze.cat\/?p=47125"},"modified":"2025-11-17T11:15:23","modified_gmt":"2025-11-17T10:15:23","slug":"france-housing-crisis-worsens","status":"publish","type":"post","link":"https:\/\/www.11onze.cat\/en\/magazine\/france-housing-crisis-worsens\/","title":{"rendered":"France: the housing crisis worsens"},"content":{"rendered":"<div class=\"component text\">\n  <div class=\"container\">\n\n\n    <div class=\"row\">\n      <div class=\"col  col-lg-8  offset-lg-2\">\n        <h3><strong>The real estate sector is experiencing a sharp drop in sales caused by high-interest rates and difficulty in obtaining credit. Fran\u00e7ois Villeroy de Galhau, governor of the Bank of France, urges commercial banks to make it easier for consumers to borrow.<\/strong><\/h3>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The rise in interest rates that began more than two years ago across the European Union has had an effect on the real economy, causing <\/span><b>European residential real estate investment to fall by <\/b><a href=\"https:\/\/www.realestate.bnpparibas.com\/europe-cre-360-report-november-2023\"><b>54%<\/b><\/a><b> in the first nine months of 2023<\/b><span style=\"font-weight: 400;\"> compared to the previous period, 55% lower than the average of the last five years.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This implosion of the real estate sector has been particularly evident in Europe&#8217;s richest countries. In France, the year began <\/span><b>with construction of new housing falling to levels not seen since 2010<\/b><span style=\"font-weight: 400;\">. As wages stagnated, prospective buyers were faced with soaring inflation and increasingly unaffordable mortgages. This translated into a sharp drop in real estate transactions in the first half of 2023, particularly significant (-30%) in the <\/span><a href=\"https:\/\/adrianleeds.com\/wp-content\/uploads\/11-2-23_Communique-mensuel_2023-02_prix-fin-aout-2023.pdf\"><span style=\"font-weight: 400;\">Paris<\/span><\/a><span style=\"font-weight: 400;\"> metropolitan area.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The French government and the ECB indicate that, for the time being, there will be no further interest rate hikes. Even so, according to the barometer of the <\/span><a href=\"https:\/\/www.odoxa.fr\/sondage\/linflation-et-la-reforme-des-retraites-incitent-les-francais-a-epargner-plus-encore\/\"><span style=\"font-weight: 400;\">Odoxa<\/span><\/a><span style=\"font-weight: 400;\"> Demoscopic Institute, the rise in interest rates, the difficulty in obtaining credit, and concerns about the current international economic situation have caused <\/span><b>38% of French consumers who were considering a real estate project to cancel or postpone it<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This crisis is having <\/span><b>a significant impact on the whole real estate sector, which represents 13.3% of France&#8217;s GDP<\/b><span style=\"font-weight: 400;\">. Real estate agencies, construction businesses, developers and, especially, credit intermediaries have experienced an increase in the number of insolvencies that had not been seen for years.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to data from <\/span><a href=\"https:\/\/www.altares.com\/fr\/publications\/etudes-defaillances-sauvegardes-entreprises\/\"><span style=\"font-weight: 400;\">Altar\u00e8s<\/span><\/a><span style=\"font-weight: 400;\">, an agency specialising in business information, during the first four months of the year, <\/span><b>non-payments by developers have increased by 53.8%, those of construction companies by 55.6% while those of real estate agencies have almost doubled<\/b><span style=\"font-weight: 400;\">, with an increase of 84% compared to the same period in 2022.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><b>Facilitating access to credit<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">With interest rates rising from an average of 1.03% in October 2021 to more than 4% in May 2023, and strict regulations on the granting of mortgages,<\/span><b> obtaining a loan has become increasingly difficult for consumers<\/b><span style=\"font-weight: 400;\"> looking to buy a home.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The governor of the Bank of France,<\/span><b> Fran\u00e7ois Villeroy de Galhau, has taken a stand against investors who expect interest rate cuts in the first half of next year<\/b><span style=\"font-weight: 400;\">, stating that the ECB is likely to keep them at 4% &#8220;at least for the next few meetings and the next few quarters&#8221;.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Even so, he urged commercial banks to \u201cplay the game\u201d, facilitating lending to consumers, <\/span><b>&#8220;It is desirable that the supply of bank loans now gradually recovers, but without running the risk of over-indebting households&#8221;<\/b><span style=\"font-weight: 400;\">. Bear in mind that the granting of real estate loans by commercial banks is at historic lows that have not been seen since 2015.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In this context, there has been an average year-on-year fall of 3% in house prices and this trend is expected to continue over the next six months, especially in large urban centres. Eric Allouche, CEO of ERA Immobilier, noted that <\/span><b>property price falls are moderate compared to the collapse in sales<\/b><span style=\"font-weight: 400;\">, but that it is possible that by the end of the year house prices will fall by up to 6%.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><b>Protect yourself from economic crises with the ultimate safe-haven asset: gold. If you want your savings to keep or increase their value, <\/b><a href=\"https:\/\/www.11onze.cat\/en\/gold-patrimony\/\"><b>Gold Patrimony<\/b><\/a><b>.<\/b><\/p>\n\n      <\/div>\n    <\/div>\n  <\/div>\n<\/div>\n\n\n<div class=\"component cards\">\n  <div class=\"container\">\n    <div class=\"row\">\n      <div class=\"col col-xl-8 offset-xl-2\">\n        <h1>If you liked this article, we recommend:<\/h1>\n        <div class=\"cards__wrapper\">\n          <div class=\"card\">\n            <a href=\"https:\/\/www.11onze.cat\/en\/magazine\/housing-rising-foreign-demand\/\" class=\"card-link\" target=\"_self\"><\/a>\n            <div class=\"card-img\">\n              <img decoding=\"async\" src=\"https:\/\/www.11onze.cat\/wp-content\/uploads\/2023\/02\/THUMBNAIL_HABITATGE_BARCELONA.jpg\" class=\"card-img-top\" alt=\"\">\n                <span class=\"card-category\">Economy<\/span>\n            <\/div>\n            <div class=\"card-body\">\n              <p class=\"card-title p2\"><strong>Is housing rising because of foreign demand?<\/strong><\/p>\n              <span class=\"card-time\">4 min read<\/span>\n              <p class=\"card-text small\">A significant proportion of tenants and homebuyers in&#8230;<\/p>\n            <\/div>\n          <\/div>\n\n\n          <div class=\"card\">\n            <a href=\"https:\/\/www.11onze.cat\/en\/magazine\/downside-reducing-access-credit-11onze\/\" class=\"card-link\" target=\"_self\"><\/a>\n            <div class=\"card-img\">\n              <img decoding=\"async\" src=\"https:\/\/www.11onze.cat\/wp-content\/uploads\/2023\/11\/THUMBNAIL_Credit-800x533.png\" class=\"card-img-top\" alt=\"\">\n                <span class=\"card-category\">Finances<\/span>\n            <\/div>\n            <div class=\"card-body\">\n              <p class=\"card-title p2\"><strong>The downside of reducing access to credit<\/strong><\/p>\n              <span class=\"card-time\">4 min read<\/span>\n              <p class=\"card-text 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           <br>\n              <div class=\"cards__wrapper\">\n\n        <\/div>\n      <\/div>\n    <\/div>\n  <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"","protected":false},"author":71,"featured_media":47119,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[1],"tags":[20],"class_list":["post-47125","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-finances"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>France: the housing crisis worsens<\/title>\n<meta name=\"description\" content=\"France: the real estate sector is experiencing a sharp decline in transactions due to high interest rates and the difficulty in obtaining credit.\" \/>\n<meta name=\"robots\" content=\"index, follow, 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