New homes for sale in France: French developers adapt
to the economic situation
After a record level of sales in 2007, the market of
new homes for sale in France is at a halt. The
developers are reacting and slowing down the number
of new projects launched. The result is a shortage of
homes which is going to last.
The developers should sell less than 80,000 French
homes this year compared to 127,500 in 2007 (highest
level since 1979). Pricewise, the square metre goes
up 3.4% per year. A general drop is very unlikely.
Land and construction materials are still expensive,
building regulations and energy efficiency measures
are ongoing and more and more strict which makes the
price per square metre go up. This price per m²
is around € 3,400 on average in the whole of
France.
The clients are usually solvent for up to €
3,000 per m². The properties on offer under that
price are being sold without a problem. So are the
upmarket properties for which the clientele still
exists.
The developers are adapting to the economic
situation
In order to sell the programmes for which the
marketing is coming to an end, some developers have
come up with various offers: here the first m²
is sold at € 1, there the legal fees are offered
or the property delivered with a fitted kitchen.
These types of properties are sold very quickly.
For tomorrow’s homes, the developers are
renegotiating the prices of the land and are not
buying the most expensive ones. They are only
launching the projects which are likely to be sold.
“Half of the 113,450 new homes available for
sale are made up of projects for which works have not
started yet. In case of marketing difficulties, the
developers will not go ahead with some
programmes” says Jean-François Gabilla
President of the Federation of the
developers-builders (Fédération des
Promoteurs-Constructeurs). “When you build
less, you do not make up for the lack of homes which
is estimated at 800,000. And developers are preparing
for the rise of tomorrow’s prices”.
Plan of revival
Worried about the fall of the market and anxious to
protect jobs in the building trade, the French
Government will buy back 30,000 homes issued from
private offers and for which the works have not yet
started. The objective being to increase the supply
of land on offer and to build more.
(Immo Neuf – Nov 2008)
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