Contruction of new french property plummets between April and June

ACCORDING to an article in Le Figaro this week, the construction of new housing has plummeted by 28.2% between April and June while the number of applications for planning permission that were granted fell by 15.5% according to figures from the Ministry of Ecology.

The figures indicate that the outlook is bleak.

In the second quarter of 2008, new build construction fell by 28.2% to 79, 220 units between April and June, and planning was granted to build 115,880 units across France.

For the first time in three years, the threshold of 400,000 new builds has not been reached admits the Ministry of Ecology while the government's objective is to build 500,000 houses per year.

These figures published by the Ministry of Ecology confirm the marked slowdown in the construction sector observed in the first quarter.

In the last 12 months, the number of new builds has fallen from 6.5% to 394,859 units. The number of applications for planning that were granted fell by 11.5% to 503,471 units.

For the President of the Federation of property developers (FPC), Jean-François Gabilla, these figures re "not surprising" because they are only "the consequence of market turnaround" which started in late 2007.

Nevertheless, he says, "we knew that the market would slow, the global financial crisis caused an even stronger fall."

He expects there to be a further decline in the third and fourth quarter, "probably" in the same proportions as "we take the full brunt of" declining sales in the second quarter.

According to a study by HSBC, the decline in new housing and the number of building permits granted will continue its contraction in the second half.

"The housing market is back in a cycle of adjustment, write economists of the bank. According to our analysis, the selling price of housing will continue to decline until 2012. "