Toulouse: new housing faces ‘worst crisis since 2009’

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The war in Ukraine and inflation-related uncertainty caused a very sharp drop in new home sales in Toulouse in Q1 2022. Developers and co-landlords call for government response

“This is unheard of since the 2009 financial crisis.” Letizia Vidal does not go there in four ways. “If the state does not respond, we will face a shortage of housing and extreme difficulties in accommodating new settlers in the territory.” The new president of the Toulouse Real Estate Observer, which brings together the main promoters of Toulouse, begins his three-year term by sounding the alarm.

In Toulouse, only 504 new units were put up for sale in Q1 2022, down 5% compared to Q4 2021, but above all, down 28% compared to Q1 quarter of 2021. This level is the lowest since the 2009 crisis for 1 quarter, according to the Real Estate Observer.

“Investor confidence has skyrocketed”

The new housing market is a clear indicator of the city’s dynamism. However, the war in Ukraine, which has led to increased stocks of raw materials and, above all, great uncertainty at the global level, is putting pressure on investment. Observations are much the same in the big cities of the Greater South, including Bordeaux and Montpellier.

“There is clearly a shortage on the market,” Laetitia Vidal analyzes. In Toulouse, there are only 8.3 months of stock left. In other words, at the level of purchases in the last four quarters, all available homes will be sold in eight months.

Homes are no longer for sale, goods are expensive, and investor confidence has waned. “There is a collapse in sales to investors (-41%). Their confidence has vanished. Fortunately, the owners-tenants completed the purchase in the first quarter (647 sales) in a hurry, which reduced the sales level, but still at a moderate level. We saw this at a new home fair where contacts and especially turning contacts into sales have never been so strong. Nearly 60% of sales to owner-tenants in a quarter, I’ve never seen anything like it.”

The building will also toast

The swinging new market and the entire construction ecosystem is at risk. “What industry can reduce activity by 60% in 3 years? It should be remembered that housing is two jobs that cannot be moved. Construction companies will also be in the red. This will affect many people,” warns the president of the Observer.
So what to do? Will the crisis of confidence last? Will inflation continue?
“Today there are still cranes, but these are the lights of the past. Current projects correspond to programs launched 3-4 years ago. But in two years, we won’t see these faucets anymore, because very few new programs can be launched without the support of investors and communities.

The President of the Observer calls on the state and communities to take “strong” action to restart real estate programs. “And this restoration in Toulouse must be done in a densely populated area, that is, in Toulouse and its 1st crown. There is a problem of land supply in the area, which is problematic. It is necessary to have a real awareness on the part of everyone. A 6-storey house can be very well received if the road infrastructure, schools follow. Everyone has to make an effort.”

Social housing: 45,000 pending requests

The new housing crisis is also a social housing crisis. Free-priced new housing programs often include a share of social housing. If one stops, the other stops too. There are currently at least 45,000 social housing requests pending in the Haute-Garonne (including 37,000 in the Toulouse Metropole). And this figure is increasing by 2% every year. As Pierre Marchal, managing director of the Les Chalets group and member of the office of the Toulouse Real Estate Observer, points out, “The urban area of ​​Toulouse should absorb between 15,000 and 20,000 inhabitants a year. Therefore, we must build housing, all types of housing. However, the cost of raw materials is growing rapidly, funding for new programs is drying up. There is a real danger of a housing shortage. We do not see this yet, but in two or three years it will be evident. »