Summer slump leads to 12.1% fall in new-builds

Coming after two solid years of rising numbers, the government figures showed only a slight fall of 4.3% between April and June but a plunge in July. The number of new-build starts also fell by 4% in April-June and then intensified to 4.9% in July to total 102,700.

The Fédération Française du Bâtiment (FFB) said it was “worrying” as it looked as though the number of starts could fall back below the 400,000 a year level after jumping to 418,900 in 2017.

It had been boosted by public aid such as the Prêt à taux zéro (PTZ) 0% interest rate on loans for new-builds plus low VAT in some areas and reduced notaire charges of just 2-3% rather than the normal 7-8% for older properties. But it was hit by restrictions brought in by the Macron government that reduced the geographic areas concerned.

FFB president Jacques Chanut said the industry had been “in a deep depression for eight years” until the effects of housing aid started to be felt. “Now we are in a delicate period of remission; the industry needs a little time to believe that it is cured.”

Small building businesses say they have order books with about seven or eight months of work, but this could be hit as new Ecology Minister François de Rugy said the CITE tax credit for work to improve energy efficiency could be cut.