Law aims to cut construction costs

A law passed in June 2025 aims to reduce construction costs in French overseas territories by allowing the use of local or imported materials without the European CE marking. However, the necessary decrees to implement the law have not yet been published, delaying its effect.

Construction costs remain high

Despite the new law, the cost of building a new home in the overseas territories has risen by 30% since 2020, according to CDC Habitat, a public housing agency. Prices have doubled in Mayotte compared to those in Metropolitan France, and materials in Reunion have been marked up by 39% since 2018.

Implementation delayed

The law, introduced by socialist senator Audrey Bélim from Reunion, requires validation by two regional construction committees. Sixteen months after its adoption, the required decrees have still not been published. The minister in charge of housing, Vincent Jeanbrun, says the Council of State’s approval is expected soon, but senator Bélim now estimates the law might not take effect until early 2027.

Delays due to bureaucracy

The Federation of Enterprises in the Overseas Territories (Fedom) cites bureaucratic hurdles and ministerial instability as reasons for the delay. President Hervé Mariton says administrations often overstep their roles, leading to inefficiency. He warns that favoring imports over local production could be a political error, as local industries, such as compressed earth brick manufacturing in Mayotte, are already emerging.

Industry resistance to change

A senior construction executive, speaking anonymously, says he would not switch to cheaper imported materials even if allowed, fearing damage to the fragile local economy. Industry representatives also warn that insurance companies may block the use of non-CE marked materials, as they are the final gatekeepers for construction projects.

Limited cost savings expected

Fedom expects the law to have only a limited impact on construction costs. Labor, which already accounts for nearly half of construction costs, will remain a major expense. Additional costs for product testing and new shipping routes may further reduce potential savings, as seen in Cayenne, where a local craftsman failed to find cost-effective imports due to high logistics costs.

Carbon tax complicates matters

The European carbon tax on imported cement and steel, effective since January 2026, adds another layer of complexity. While the European Parliament debated an exemption for overseas territories, member states have pushed for a stricter approach, potentially keeping the tax in place. This issue is overshadowed by a deeper budget crisis in the territories, with funding for social housing in Guyana dropping by 60% in 2026.