New-build market feels the pinch

NEW-build developers have seen a slump in business as the market feels the effects of the loss of aid towards buying property and boosting energy efficiency.

Business was down 14.5% to just 19,600 sales across France in the first quarter of 2012. New starts on building contracts fell by 22.5% between February and April.

Building permits applications fell just 2%, but it means the market is likely to see just 320,000 new homes built in 2012. This will need a real boost if President Hollande is to match his campaign pledge of 500,000 new homes a year. The boost, however, will not be coming from the Loi Scellier, which gave a tax gain for people buying new property for let. Housing minister Cécile Duflot has confirmed it will be phased out by December 31.