France’s building land sales have dropped 37% in a year. Explore the causes and consequences of this alarming real estate trend.
In a striking turn of events, the French real estate landscape is grappling with a significant downturn in building land acquisitions. Recent data from the Notaires de France reveals a staggering 37% decrease in the purchase of building plots by individuals between October 2023 and September 2024. This decline can be attributed to a confluence of factors, including escalating interest rates, surging construction costs, and a strategic pivot towards the zero-interest loan initiative, alongside the ambitious goal of achieving “zero net artificialisation” of land.
The statistics, published on December 16, 2024, paint a sobering picture: notaries recorded a mere 43,000 transactions of building land over the preceding twelve months, a stark contrast to the 68,000 transactions documented in the same timeframe the previous year. Furthermore, when juxtaposed with the period spanning mid-2022 to mid-2023, the figures reveal an even more alarming 43% collapse in sales.
The malaise afflicting the building land market mirrors the broader challenges faced by the real estate sector, which is currently ensnared by rising borrowing costs and exorbitant construction expenses. These financial pressures have effectively stymied both the acquisition of existing homes and the initiation of new construction projects. Compounding these issues are various political measures, notably the recalibration of interest-free loans directed towards regions experiencing acute housing shortages, as well as the overarching objective of “zero net artificialisation” of land (ZAN).
The Superior Council of Notaries (CSN) has underscored that while the decline in building land transactions was already in motion, its acceleration coincides with the recent announcement regarding the exclusion of single-family homes from the zero-interest loan program—a policy change that took effect on January 1, 2024.
In terms of pricing dynamics, the average cost of land has witnessed an astronomical increase, more than doubling between 2000 and 2008, and continuing its upward trajectory to reach an average of 84,100 euros in 2024. Interestingly, the average area of acquired plots experienced a contraction from 2000 to 2015, only to embark on a resurgence from 2020 onwards. As of 2024, the average size of a purchased building plot stands at 920 m², a figure that reflects the evolving landscape of land acquisition in France.
The current property crisis in France serves as a poignant reminder of the intricate interplay between economic factors, political decisions, and market dynamics, all of which are shaping the future of real estate in the country.
