Prices, interest rates, land…: in Nîmes, developers are reducing their sails in the face of the crisis

Rue de l'Hôtel-Dieu Midi Libre – Geoffrey Gavalda

New housing programs revised downwards or put on hold, developers sometimes on the verge of bankruptcy and a paradoxically tense real estate market, while the supply of housing is lower than demand. Analysis with Pierre Martin, the Gard president of the Building Federation, and Thierry Iacazio, the president of the Occitanie Méditerranée real estate developers federation (FPIOM).

There are those who prefer to see the construction site finished soon and those who do not see it coming out of the ground! Faced with the real estate crisis, which is also that of the construction industry, professionals are more or less optimistic about the prospects for recovery but they all share the same analysis, a mixture of national and more local issues.

Everything is soaring: construction costs and credit rates

Upstream, the surge in construction costs with the war in Ukraine, downstream interest rates which have suddenly gone from 1.2 or 1.5% to more than 4% (even if they have been falling for a few weeks), slowing down households' purchasing possibilities and the end of the Pinel tax exemption scheme. In the middle, the developers “stuck” by these multiple constraints.

“It's quite simple, since the beginning of 2022, the price of materials has increased by 15%”,observes Pierre Martin, the president of the FFB in the Gard. And since last July, business failures have been increasing, even among serious companies that had a storefront, “which is symptomatic of the seriousness of the crisis we are going through. In October 2024, over a rolling year, we had lost 500 jobs in the construction industry”, he worries.

Pierre Martin, President of the FFB du Gard: “We have never built so little”. Midi Libre – MiKAEL ANISSET

And construction standards such as the Zan on soil artificialization or the new RE 2020 thresholds on the carbon impact of buildings that came into force in January add obstacles and increase costs. “In Nîmes, developers have filed permits in 2024 to avoid RE 2020 but are not starting construction sites”, notes Pierre Martin.

Projects stopped or revised downwards

Construction starts are dramatically low, “in 2025, we will have the level of construction of the post-war period!”, warns the president of the FFB du Gard.

“It's true, developers have had to rework real estate projects to avoid damage, or even abandon some of them because otherwise the sale prices would not have found buyers. The challenge for us is marketing, even if it means sometimes lowering prices by 5% to 10%”, explains Thierry Iacazio, the president of the FPIOM. “If the construction site is launched, the developer risks finding himself with unsold apartments. Especially since in 2023, there was a peak in building permits in Nîmes and a lot of products on offer. In the second quarter of 2024, around 200 homes were taken off the market. For developers, this minimises risks and cleans up the market”.

Thierry Iacazio, President of the FPIOM: “We are worried about 2025”.

Buyers, for their part, were brutally slowed down by interest rates that soared to more than 4% after having been around 1.2% or 1.5% for a long time. “An interest rate that increases by 3% over 20 years, that's 60%. For a property worth €200,000, the cost of credit is €120,000 over twenty years”, calculates Pierre Martin. Prohibitive! The prices of new properties per square meter have been able to climb to €4,500, or even €5,200. “Who can buy a 100 m2 apartment for €450,000 ?” asks Pierre Martin. “Today, prices are adapting to the Nîmes market, around €4,000/m2”,assures Thierry Iacazio.

Land speculation

Another, more local fact of this complex equation, is the land speculation that has deregulated the market. “Blocked in the Montpellier urban area, Montpellier developers have turned to Nîmes, but also Béziers and Sète”, says Thierry Iacazio. This has caused the price of land to soar, which is also becoming scarce. “Eight years ago, the price per square meter was €250, it has risen to €800”, denounces Pierre Martin. A real estate agent from Nîmes cites the example of a villa in Castanet put up for sale at €700,000, finally bought for €900,000 by a developer to build a building on the land.

Route d'Uzès, the Domaine de la pinède is supported by two developers, one of which has gone bankrupt. Midi Libre – K. H.

“The end of Pinel, a mistake”

Finally, the end of the Pinel scheme at the end of 2024, allowing people to buy to rent and save on taxes, has definitely jammed the system. “There was speculation on Pinel”, Pierre Martin acknowledges, but removing the scheme is even worse. “First-time buyers represent 10% of the promotion, social landlords 20%, the rest are private investors who need this type of help”, he pleads.

And the future looks rather bleak. “There is a lot of inertia to shake up the system, 2025 will be very difficult, the construction industry could lose 150,000 jobs (direct and indirect)”, predicts Pierre Martin. Developers are also more than worried about the year ahead “even if the market self-regulates, we have no visibility”.

Cédric Gonzalez, president of NG Promotion, which has just gone bankrupt and which was responsible for the Pinède estate, on the Uzès road, among other things, in Nîmes, is also very pessimistic about the profession. “We can't imagine a worse picture. At the commercial court, I come across a lot of developers in great difficulty who can't sell their apartments! In addition, the municipal elections in 2026 risk freezing all projects…”

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