The real estate development sector in France continues to struggle, while the market for single-family homes is showing signs of recovery. According to recent reports, the number of new housing projects started in 2025 reached a low of 285,000 units, compared to 385,000 in 2019. Despite government goals set at the beginning of the year, housing production has not returned to pre-pandemic levels. Developers must sell at least half of their projects before construction can begin, and in the second quarter of 2026, housing reservations dropped by 23.6 percent compared to the same period in 2025. Additionally, 14 percent of projects were canceled due to a lack of financing, even though they had already been marketed. This trend, while showing a slight improvement from the first quarter, reflects caution rather than recovery, according to Pascal Boulanger, head of the developers’ association. The ongoing challenges in the real estate promotion sector stem from multiple factors. Rising material and land prices in 2022, combined with high interest rates and the end of the Pinel tax incentive program in late 2024, have made it harder for developers to attract private investors. Many rely on government incentives to make their projects financially viable. Developers argue that for every euro of public funding, the state earns between 2 to 2.5 euros in tax revenue through value-added tax (VAT). However, this argument has not been persuasive in recent years. Political changes, such as the transformation of the ISF (Wealth Tax) into the Property Wealth Tax under President Emmanuel Macron, have also affected the sector’s financial outlook. Urban planner David Rottmann points out that developers often depend on public support during economic downturns, creating a "too big to fail" dynamic. The government’s ambitious goal of building 400,000 housing units annually—announced in February as part of a housing law project—now appears unlikely. According to the French Construction Federation, the average number of housing units started in the first five months of 2026 was 307,000, which is nearly 50,000 below the historical average. The government’s plan also includes creating 50,000 new private rental housing units, but progress has been slow. The French Real Estate Developers Federation (FPI) reports that only 150 to 200 sales have been made each month since the introduction of the new fiscal program Jeanbrun in early 2026, far below the expected 4,000. In contrast, the single-family home market has shown resilience, with a 20 percent growth in 2026. This sector benefits from a more straightforward economic model: buyers typically secure financing and purchase land before construction begins. Once permits are obtained, a single-family home is usually completed in less than a year, and its average cost is about 3,000 euros per square meter, compared to 5,000 euros for traditional real estate developments. The average price of a single-family home is now around 300,000 euros, up from 250,000 euros at the start of 2022. Damien Hereng, president of the French Federation of Single-Family Home Builders (FFC), notes that land prices act as a "shock absorber," fluctuating by up to 15 percent. The sector is expected to launch between 70,000 and 75,000 homes this year, driven mainly by the first half of the year, with a slight decline in the second half due to higher credit rates and a challenging political climate.