Chloé Lagadou, edited by Laura Laplaud / Photo credit: FRANK HOERMANN / SVEN SIMON / SVEN SIMON / DPA PICTURE-ALLIANCE VIA AFP 10:45 am, April 19, 2023

The French building federation is sounding the alarm: the new real estate crisis threatens 100,000 jobs in the construction industry by the end of 2024. After soaring construction costs and the blocking of mortgages, construction is practically at a standstill.

Faced with new housing sales declining since the beginning of the year, the French Building Federation fears the destruction of 100,000 jobs by the end of 2024. In question, the scarcity of building land in cities but also the explosion of construction costs and the soaring interest rates that block buyers wishing to invest in new real estate. At the company Isoa Ma Maison Patrimoine, which builds exclusively individual houses in Île-de-France, the observation is clear, the crisis is very present.

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Rising interest rates lead to a fall in loans granted

"For 2024, today, we have nothing, which is unique in the history of the company." The order book of Ali Riad, builder of single-family homes, is struggling to fill up. The fault is the soaring prices of raw materials. "Wood has gained more than 50%, aluminum has almost doubled. A year ago, we built a house at 100,000 euros, today we have to pay 112,000 euros for the same house," he said.

Added to this is the rise in interest rates for mortgages that slows buyers in their projects. "Today, unfortunately, it is almost 50% of projects that stop very quickly at the prospecting stage, insofar as the sudden and very strong evolution of interest rates unfortunately eliminates many first-time buyers to home ownership," he adds.

"We risk being unemployed"

On the construction site, this construction supervisor and this mason build the foundations of a house. They say they are worried about the future. "The more expensive it is, the more people will pay more and the more they won't be able to build. It worries us because we risk being unemployed, "they testify at the microphone of Europe 1. The company hopes for a gesture from the government with, for example, the extension of the zero-interest loan for buyers of new homes in 2024.