Inflation in construction costs poses a lasting threat to new home sales, Actualité/Actu Immobilier

The building sector expects a lot from the next Assises du BTP, an event for which the Minister of the Economy, Bruno Le Maire, has already set a promising agenda. This is for professionals to avoid the dramatic consequences of the collapse in sales of new homes which has been observed since the beginning of the year and which darkens the outlook for the sector for 2023. Solidarity in the sector and the The indexation of market prices will also be discussed there while professionals are still faced with a violent crisis in materials.

Material inflation continues

According to Insee data, between November 2021, the start of the energy crisis, and April 2022, the prices of steel for construction and aluminum semi-finished products increased further by 27%, those of tiles by 20%, those of PVC products by 16%, those of ceramic products such as tiles by 12%, those of semi-finished copper, glass or plastic products by nearly 10%. More generally, despite near-stability in the hourly cost of labor and under the effect of an average increase of 6% in the cost of materials used, the BT01 index calculated by INSEE, which summarizes all the costs of an average building company, increased by another 3% in the first three months of 2022, after a surge of more than 5% in 2021.

The President of the French Building Federation (FFB), Olivier Salleron, hopes that these construction meetings will be held in July and calls for Parliament to be activated in September to possibly validate certain advances. The subject of support for companies’ cash flow will be studied, with questions revolving around the extension of the reimbursement of PGEs which are currently reaching their term of 2 years.

Serial surcharges

The government also seems to be listening to requests from professionals on the financing of additional costs linked to the new RE2020 standard or the recycling of construction waste with the forthcoming entry into force of EPR (Extended Producer Responsibility) from 2023. Regarding the RE2020, which entails additional costs estimated at +5% for new homes, many customers have anticipated its implementation (for permits filed since January 1, 2022) to avoid the price increase passed on by builders so well that sales are taking the hit.

The increase in the sale price of new homes, of course reinforced by the inflation of building materials, is also beginning to make them inaccessible to more low-income households already desolventized by the sharp rise in borrowing interest rates. which will certainly continue.

Tax depreciation

Olivier Salleron also intends to take advantage of these construction meetings to reiterate his request for the establishment of a generalized depreciation mechanism in favor of private rental investment, instead of tax exemptions such as the Pinel. The aim would be to put in place a permanent incentive measure (the tax depreciation of housing) replacing mechanisms that are constantly being modified or threatened with extinction, such as the introduction from 2023 of Pinel+ which will cost more expensive to investors…

Simplify further

The FFB also hopes that a real reflection will begin on the indexation of aid such as the PTZ or MaPrimeRénov’ in a world that is once again inflationary. ” The FFB will campaign for an all-out simplification to improve fluidity and remove blockages in new construction, first by effectively generalizing the dematerialization of the deposit and the instruction of permits, but also by seriously studying the track of the permit declarative or by supervising the dilatory processes of pre-examination of the permits », adds Olivier Salleron. The President of the FFB also aspires to the establishment of a structure such as a National Construction Council which would be regularly consulted on this type of subject.