France: The purchasing power issue will not be resolved as long as the housing cost issue remains unresolved

The French government is boosting consumer purchasing power with tax cuts and hikes in public transfer payments, while real wage growth in France continues to outpace labour productivity growth: there should not be a purchasing power problem in France. But in reality , this problem has reared its head again because of housing costs, despite the decline in interest rates: rents are rising faster than prices ; real estate prices are rising faster than wages. Moreover, because the volume of construction has fallen, these tensions in rents and prices may get worse. As long as the problem of housing costs has not been resolved, which will require a large increase in residential construction, the efforts made elsewhere will fail to resolve the problem of purchasing power in France.