Real estate development in Languedoc Roussillon: “We are in year 2 of the crisis, we cannot wait”

The real estate development market in Languedoc Roussillon is still suffering. Listings for sale fell by 31% in the first half of the year. MAXPPP – Bruno Levesque

Regional President of the Federation of Real Estate Developers Occitanie Méditerranée (FPI OM), Thierry Iacazio is sounding the alarm. In the first half of 2024, listings for new homes fell by 31%.

It is a descent into hell that is reminiscent of that observed during the real estate crisis of the early 1990s. And what is true at the national level is just as true in the regions. Over the first six months of 2024, new housing listings fell by 31% in Languedoc Roussillon. And net sales of 21 %.

"We are in year 2 of the crisis, we cannot wait, warns Patrick Iacazio, new president of the FPI OM, who presented this Thursday a report on the first half of 2024. The public authorities must take measures as quickly as possible, in particular to re-encourage investors, who are no longer there".

Béziers, the only regional exception to the gloom

Investors, once numerous, particularly in Languedoc Roussillon where they had represented up to more than 80% of new housing acquisitions, are becoming rare. The shortage of products partly explains their withdrawal. All the cities in the region are affected, with the exception of Béziers, “the only town to record an increase in sales to investors”.

On the Montpellier market, which represents more than half of the regional real estate development market, investors, who then drove the rental market, have represented 65% of sales in recent years. The remainder of the sales were made as part of the acquisition of a primary residence.

The damaging withdrawal of investors

“Today, it's the opposite”, notes Pierre Raymond, director of Pragma-Sogeprom, one of the largest developers in the region. He dates the “investment shock” to “late 2023, early 2024”. In the first half of the year, in the Montpellier metropolitan area, out of the 392 sales recorded, only 149 were made by investors.

“In the former Languedoc Roussillon, sales to investors fell by 12% in the first half of 2024, compared to the first half of 2023”, notes the FPI OM. Worse, the drop is 53% if we refer to the first half of 2022, on the regional market. And the end of the Pinel scheme, announced for the end of this year, will accentuate this trend, “without any possible extension or new tax-exempt scheme to fuel the rental market”.

The (multiple) reasons for a crisis

The reasons for the crisis are well-known: prices that are too high, lack of land, rising construction costs, (political) choices by certain mayors who have initiated a reduction in the number of building permits, but above all, rising bank interest rates that have rendered many candidates for home ownership insolvent. property.

The crisis is however not observed equitably according to the territories. Thus, the agglomerations of Béziers, Narbonne and Sète “record an increase in sales in the first half of 2024”. Here again, Béziers is the “only urban area to record a dynamic in sales: +34% compared to the first half of 2023”.

Half as many sales in 2024

Nîmes and Perpignan are more severely affected by the crisis, with a reduction in their sales, and in particular the Gard capital which records a “a sharp decline in sales of 32%”. It must be said that the Nîmes supply has been reduced by 35% in volume to 452 housing units, compared to 611 in the first half of 2023.

Prices have fallen by 5% to 6%, but no more

Professionals thought they would achieve a price reduction of “10% to 15%, as the public authorities wanted”. It failed. “National measures have been a “failure”, Thierry Iacazio, regional president of the Federation of Real Estate Developers, does not hesitate to say. In the first half of 2023, the observed decline is around 5%. “The trend is downward in Montpellier and Béziers. On the other hand, prices are stagnating in Narbonne and Perpignan and increasing in the Sète and Nîmes sectors", specifies the FPI OM. Nevertheless,“these price developments should be put into perspective in light of the low sales volume”. On average, in the region, it is necessary to count on 4,495 euros per m². With fairly significant differences depending on the territories. Thus, the price of m² in the Montpellier metropolitan area observed in the first half of the year amounts to 5,040 euros, compared to 3,870 euros Nîmes, 5 010 euros à Sète, 3 520 euros à Béziers, 3 830 euros & Narbonne and 4 220 eurosà Perpignan.

While the volume of sales was around 5,000 homes in Languedoc Roussillon in the years 2019-2022, it fell to 4,000 in 2023. “The projections for this year are around 2,000 homes”, estimates Thierry Iacazio. He adds: “the future is more than uncertain”. An understatement.

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