Market Structure and Housing Production in France

The French real estate development market currently comprises more than 7,500 active developers. While this figure may suggest a highly competitive market, it actually conceals substantial heterogeneity among market participants. Around ten large developers account for between 28% and 38% of annual housing production, while thousands of smaller firms share the remainder of the market. This situation raises important questions regarding differences in strategies between large and small developers, their location choices, and the effects of this heterogeneity on market structure and performance. Although the economic literature has long viewed developers as homogeneous firms operating in a competitive environment, more recent studies have highlighted the importance of differences in firm size, costs, access to finance, and regulatory constraints. Building on this emerging literature, this presentation examines developer heterogeneity at both the national level and within the Lyon functional urban area. This two-tiered approach makes it possible to identify structural patterns at the national scale while analysing how they are reflected at the local level. Focusing on the Lyon metropolitan area also provides insight into the fine-grained spatial dynamics of the market and allows us to examine the extent to which developers' location choices are shaped by intra-urban price gradients and local market conditions.