Housebuilding Figures Mask Fall in Sales

Thursday 05 April 2012

Despite a buoyant level of house building in France last year there was a fall in new homes sales of 10.5%.

Over 400,000 new homes were constructed in France in 2011, an increase of 20% on 2010.

The following table shows a regional breakdown of new housebuilding, as well as planning consents granted for new homes. The table compares the year ending December 2011 with that for the same period in 2010.

The number of new starts for apartments grew in the year by 34% compared with 2010, while individual homes activity grew by 11.8%.

Not surprisingly the highest levels of activity occured in the Ile-de-France, Provence-Alpes-Côte D’Azur and Rhône-Alpes, regions that are the economic motors of the country.

Despite the substantial growth it is interesting to note that activity in some regions actually declined, notably in Champagne-Ardenne, where both housing starts and planning consents went down in comparison with 2010.

	Housing Starts		Planning Consents
New Homes Activity 2011
Region	Jan/Dec	Variation (%)	Jan/Dec	Variation (%)
Alsace	12,964	9.2	15,670	23.8
Aquitaine	29,653	27.0	38,679	28.8
Auvergne	6,742	7.3	7,711	- 4.1
Basse-Normandie	8,633	20.9	11,003	18.3
Bourgogne	7,339	25.1	9,740	30.8
Bretagne	25,122	5.9	29,438	10.0
Centre	14,459	17.1	18,164	15.0
Champagne-Ardenne	6,513	- 1.0	7,112	- 2.3
Corse	4,751	28.4	6,132	- 6.7
Franche-Comté	5,344	- 13.1	7,154	8.3
Haute-Normandie	9,780	13.5	15,944	23.2
Ile-de-France	43,979	4.6	61,328	20.5
Languedoc-Roussillon	25,981	19.2	28,113	0.9
Limousin	3,383	7.4	3,710	- 11.1
Lorraine	9,478	9.0	15,738	39.7
Midi-Pyrénées	27,583	44.2	34,307	37.2
Nord-Pas-De-Calais	18,001	18.7	23,474	8.8
Pays de la Loire	32,865	10.7	33,809	- 2.3
Picardie	9,172	45.1	11,115	16.6
Poitou-Charentes	11,021	3.5	15,437	14.8
Provence-Alpes-Côte D’Azur	36,038	79.9	48,994	43.3
Rhône-Alpes	51,417	26.4	64,904	14.5
Total France	400,182	20.2	432,717	17.3

Source: SOes, Sit@del2

House Sales

Although the construction industry was busy in 2011, new house sales actually fell in the year by 10.5%, from 115,412 to 103,296. House sales fared worse than apartments, but both suffered (-9,1% for apartments and -21.5% for houses).

According to Benoist Apparu, Minister of Housing, ''the diminuation may be explained notably by the difficulties concerning access to mortgage finance, and by a targeting of fiscal support towards those areas where there is the greatest need for new homes.''

Neither does it seem there is any real confidence that sales will improve in 2012. The leading housebuilder Nexity estimates that the sector will ''touch a low point'' with probably only 70,000 to 80,000 sales in the year. This is a view that is also shared by Marc Pigeon, president of the Fédération des promoteurs immobiliers (FPI).

There is already some evidence of a parallel fall in new housing starts for January 2012, which fell 32% over December 2011. "It is an historic fall for the month of January'', according the housing economist Michel Mouillart from the Université Paris Ouest. ''We have never seen that since records begain in the early 1980s'', he stated.

The reasons for the fall are not difficult to spot, for alongside fragile economic conditions there has been a reduction on the tax breaks for investing in housing, which has traditionally underpinned a great deal of the new build residential market.