Despite demand, French housing construction is still declining

The construction volume of new homes continued to shrink in France in the second quarter, even though there were positive signals from the number of sales.

From April to June, the number of construction starts shrank by 7.4%, to 86,100, compared to the second quarter of 2014, according to figures from French Department of Housing.

However, the number of building permits granted for new housing over the same period has run into the positive, for the first time in nine months, up by 3.9% to 92,100 in the second quarter compared to the same period a year earlier.

In August and September 2014, the number of building permits granted during the three previous months increased by + 1.1% and + 5.3% year on year, but this rebound did not last.

If you break down the figure for construction starts, ordinary homes were down a relatively modest 5.3% to 81,100 units. For residence accommodation however (for seniors, students or tourists) however, the number dropped of a cliff, falling 31.2% to 5,000 units, albeit in this niche segment of the market.

For the twelve-month period ending late June, housing starts declined 5.8% to 344,000. As for building permits, which give us information how many construction starts we’ll see in the future, they are still in the red too, with a similar decline of 5.4% to 362,400 units.