Decline in the sale of new build properties
27 August 2008
New figures released today by the Ministry for Ecology show a decline of 34% in the sale of new build properties in France.
This figure is more like 50% in the southwest of France, including the Dordogne and Lot-et-Garonne, according to an article in the Sudouest daily newspaper.
As of the 30th June 2008, the stock of new build homes that remain unsold reached 110,000, "a figure never seen before", commented the Ministry.
Private investors are the most affected. The French switched from investment in pensions to property during the booms years of the property market in France over the last decade. A large proportion of owners try to rent their new build properties but occupancy is at only 30% year to date leaving them in a delicate financial situation.
A spokesman for the Union of Home Owners in the Lot-et-Garonne said "oversupply of housing now makes investment in rental property very risky".
The market research institute, Xerfi, are quick to reassure investors that a crash in the French property is avoidable. It says, "unlike the USA, UK and Spain, the financial situation in French households remains healthy because the French have not put themselves in debt to the same extent as others."