Continuing Decline in New Housing Sales in Toulouse: Historical Low with 25% Drop in First Half

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Toulouse Housing Market Faces Steep Decline as sales Plummet 25%

Toulouse, France – A notable downturn is gripping the housing market in the Toulouse metropolitan area, with new home sales experiencing a dramatic 25% decrease in the first six months of 2025 compared to the previous year. The alarming figures, released this week, point to a confluence of factors, including dwindling investor confidence and bureaucratic hurdles in securing building permissions.

Investor Exodus Fuels Sales Slump

Preliminary data indicates that just 1,005 new homes have been purchased by individuals across the Toulouse urban area so far this year, with 506 of those sales occurring within the city limits themselves. This represents a stark contrast to the robust market conditions seen in recent years. Industry experts attribute this downturn largely to the withdrawal of investors, who now account for only 20% of sales-a sharp decline from the 62% recorded in 2021.

The expiration of the Pinel tax incentive, a program designed to encourage investment in new housing, is widely seen as a catalyst for this shift. The program’s termination has removed a key financial incentive for investors, leading to a significant reduction in demand.

Prices Remain Surprisingly Stable

Despite the sharp decline in sales,prices for new housing in the Toulouse area have not followed suit. As of mid-2025, the average price per square meter stands at €4,490, representing a 2.3% increase compared to the average over the past three years. Developers cite rising land and construction costs as the primary drivers of this price stability, despite acknowledging that it’s unlikely to stimulate renewed demand.

The newly introduced intermediate rental housing system (LLI), intended as a replacement for Pinel, has yet to gain significant traction among investors.

Building Permit delays Exacerbate Crisis

Beyond the decline in investor activity, a growing backlog in building permit approvals is further compounding the crisis. While the city of Toulouse was previously considered a leader in permit processing, the number of permits issued has fallen sharply in recent years. In 2023, the city issued 4,800 permits, but this number dropped to 2,800 in 2024, with projections indicating fewer than 2,500 will be approved this year. It’s estimated that approximately 30% of approved permits never actually result in completed construction projects.

Concerns are rising that these delays are notably acute in the Sicoval territory,despite planned metro expansions in the area.

Year	Building Permits Issued (Toulouse)	Change (%)
2023	4,800	–
2024	2,800	-41.7%
2025 (Projected)	2,500	-10.7%

empalot district Shows Resilience

Amidst the broader market downturn, the Empalot district is demonstrating notable resilience. The area is benefiting from increased demand for social housing with aided access programs, allowing residents to become homeowners while qualifying for a 5.5% VAT rate. The FPI reports a 450% increase in sales thru these programs as the beginning of the year, with 154 sales concluded.

understanding Housing Market Cycles

Housing markets are inherently cyclical, influenced by a complex interplay of economic factors, government policies, and demographic trends.Periods of rapid growth are often followed by corrections, as affordability constraints and shifting investor sentiment dampen demand. The current situation in Toulouse reflects a confluence of these forces, highlighting the importance of long-term planning and sustainable housing policies. Statista provides complete data on housing starts in France, offering ancient context and future projections.

Frequently Asked Questions About the Toulouse housing Market

• What is causing the decline in new housing sales in Toulouse? The decline is primarily due to the end of the pinel tax incentive, leading to an investor exodus, and delays in building permit approvals.
• Are housing prices falling in Toulouse? Surprisingly, no. Prices have remained stable and even increased slightly, driven by rising land and construction costs.
• What is the LLI system,and will it help? The LLI (intermediate rental housing) system is a new initiative designed to replace Pinel,but it has not yet gained sufficient traction.
• What is the situation in the Empalot district? Empalot is bucking the trend, experiencing increased sales through aided access social housing programs.
• What is the outlook for the Toulouse housing market? Industry experts foresee continued difficulties in the short term and anticipate potential challenges in the next three to four years.
• How do building permit delays impact the housing market? Delays restrict the supply of new homes, exacerbating affordability issues and hindering market growth.
• What role does investor confidence play in the housing market? Investor confidence is crucial; a lack of confidence leads to reduced investment, impacting construction and overall market activity.

What steps do you think local authorities should take to address the housing crisis in Toulouse? Share your thoughts and join the conversation in the comments below!

How does the decline in new housing sales in Toulouse compare to the broader trends in the French real estate market?

continuing Decline in New Housing Sales in Toulouse: A Deep Dive into a Troubled Market

A Shocking Downturn: New Housing Sales Plunge

The Toulouse real estate market is experiencing a significant downturn,with new housing sales figures painting a bleak picture. The first half of 2025 witnessed a staggering 25% drop in sales compared to the previous year,marking a ancient low.this decline raises serious concerns about the health of the Toulouse housing market and its long-term prospects. This drastic reduction in sales is impacting real estate developers in Toulouse and the wider economy.

Key Factors Contributing to the Housing Market Slump

Several interconnected factors are responsible for the current crisis in the Toulouse new construction market. understanding these drivers is crucial for both investors and potential homebuyers. Here’s a breakdown:

• Increased Interest Rates: Rising interest rates have significantly impacted mortgage affordability,making it more tough for prospective buyers to secure financing. This is a major hurdle for both first-time buyers and those looking to upgrade their homes.
• High Construction Costs: The cost of construction materials and labor continues to escalate, leading to higher property prices. This reduces the attractiveness of new builds relative to the existing housing stock.
• Economic Uncertainty: Broader economic concerns, including inflation and global uncertainties, have created a climate of caution among potential buyers and investors.
• Oversupply in Certain Segments: Some analysts suggest an oversupply of certain types of new housing, particularly apartments, which is contributing to price stagnation or even decline in those segments.

Comparing Toulouse to Other European Cities

To put the Toulouse real estate situation in outlook, it’s helpful to examine comparable European cities. As per available data, cities like Porto, Bilbao, and Seville share similar characteristics in terms of population size and economic profile to toulouse, providing relevant context. Analyzing data would provide crucial data on which cities also have issues and which have managed to stay afloat.

Impact on the Construction Sector

The decline in new housing sales has a cascading effect throughout the construction industry.Construction companies in Toulouse are feeling the pinch as projects are delayed or canceled. This affects employment, investment, and overall economic activity. The Toulouse construction sector is vital to the area.

Here are some of the immediate challenges:

• Job losses: decreased construction volume is leading to layoffs.
• Project Delays: Developers are delaying projects, waiting for market conditions to improve.

Strategies for Navigating the Challenging Market

Despite the downturn,there are strategies that buyers,sellers,and developers can employ to navigate the turbulent market. Here are some actionable tips:

• For Buyers:
  • Carefully evaluate financing options and explore government assistance programs.
  • Negotiate aggressively on prices,as sellers might potentially be more willing to make concessions.
  • Consider purchasing existing properties instead of new construction for better value.
• For Sellers:
  • Price properties competitively and be prepared to adjust pricing.
  • Offer incentives, such as including appliances or covering closing costs.
  • Market properties effectively,highlighting their unique features and advantages.
• For Developers:
  • Re-evaluate project feasibility and consider scaling down or postponing projects.
  • Focus on market segments with sustained demand, even during a downturn.
  • Explore innovative construction methods to reduce costs.

The Road Ahead: Future Projections

Experts predict that the Toulouse real estate market will continue to face headwinds in the coming months.While some anticipate a stabilization in the Toulouse housing market by 2026, much depends on macroeconomic factors such as interest rate trends and economic growth. The recovery path is unlikely to be a straight line and will necessitate adjustments from all players in the market.

Continued monitoring of key economic indicators and market trends is essential for making informed decisions. Staying informed and adapting to changes will be critical for success in the evolving Toulouse real estate environment.