Around 300,000 new homes are built in France each year, a level of activity that is impressive when compared to the new housing supply in the UK.

When Benoist Apparu, the French Housing Minister, announced recently that construction had started on 332,000 new homes in the past year, the figures received a muted response from most commentators.

Indeed, the French daily Le Monde headlined their article, 'la construction de logements toujours en panne'.

In the UK, where in 2009/10 130,000 new homes were built, such an achievement would probably have been an occasion for the British government to declare a public holiday.

Even at the recent peak of the UK market in 2007/8, only 207,370 new homes were built.

Part of the explanation for the difference in perception is the hotly political nature of homelessness and poor housing in France.

Campaign groups consider that there is a shortage of around a million homes in the country, and they have been able to achieve a substantial level of public support and media exposure for their case.

As a result, in 2007 the government set themselves the ambitious target of 500,000 new homes a year, a figure that has never been achieved, before or since.

As can be seen from the graph below the strongest performance in recent years occurred in 2007, when 435,000 homes were built, and it has not fallen below 300,000 new homes a year in the past decade.

The orange line in the graph indicates the number of new starts, while the green line the number of new planning consents.

New Homes in France 2001-2010

Beyond the political context, one of the other factors driving the new build market in France are the tax breaks available to those who invest in new off-plan homes for rent, either as holiday accommodation or as permanent dwellings.

In the past twenty years around 1 million homes for the private rental market have been built using these incentives, although not always in the places where they are most needed.

The tax breaks and the areas where they are available are being reduced next year, although any adverse consequences for the market may well be mitigated by the more generous availability of interest free loans (prêt à taux zéro) for first time buyers.

You can read more about these tax incentives in our guides to French Investment Property. You need to be resident in France to benefit from them.

Regional Differences

As will be seen from the table below, there are significant regional differences in the level of activity (and even within regions there are substantial disparities between departments).

The table also shows that as well as over 300,000 new housing starts in the year, planning consent was also granted for a further 450,000, up 12% in the previous year.

The scale of new build activity in popular areas is clearly an important factor in dampening house price growth and no doubt one reason why France has been less vunerable to the boom and bust markets that have been so prevelant in the UK.

The figures below include apartments as well as individual houses, and conversions as well as new properties. Indeed, starts and consents for apartments exceed that for individual houses.

Source: SOes, Sit@del2