French housing starts are at their lowest level since the year 2000, reports the French daily Le Figaro, whilst Spain is starting more homes than at any time since 2008. Even so, neither country is building enough to house a growing population.

The French new housing market is experiencing a significant downturn, with both building permits and construction starts plummeting to record lows, reports Le Figaro here.

The crisis is attributed to a confluence of factors, including increased construction costs, rising interest rates impacting affordability, and reduced government support for new housing.

This is what Le Figaro has to say: 

New construction is caught in a serious crisis . Construction costs have increased significantly due to more expensive materials and stricter environmental standards. At the same time, buyers have suffered from the rise in borrowing rates and the reduction of public support measures for new real estate. Between June 2023 and June 2024, 30,500 jobs have been lost , according to the French Building Federation. In an attempt to bring some breathing space to the sector, parliamentarians are examining the generalisation of the zero-rate loan (PTZ) throughout the country, for new and old housing, whether collective or individual.

Key facts and figures for France:

• In September 2024, building permits for new homes fell to just 26,000, the lowest figure since at least 2015.
• Construction starts in September 2024 were at their lowest point since 2000, reaching only 18,900.
• Between October 2023 and September 2024, only 337,100 building permits were granted, representing a 9.4% decrease compared to the previous twelve months.
• Year-on-year, construction starts plunged by 19.7% in the twelve months leading up to September 2024.
• The construction industry suffered a significant job loss, with 30,500 jobs being eliminated between June 2023 and June 2024.

The situation is described as a “chronique d’une catastrophe annoncée” (chronicle of a foretold disaster) by the Fédération des promoteurs immobiliers (Federation of Property Developers).

One reader in the comments section highlights a major concern: ” …on oublie trop souvent que sans programme neuf, pas de logements sociaux ” (…we too often forget that without new build programmes, there is no social housing).

Spanish housing starts on the rise

In Spain housing starts (planning approvals) increased by 14pc in the first half of the year compared to the same period in 2023 to the highest level since 2008, at the tail end of a speculative building boom. The chart below illustrates new home building numbers in the first half of each year for Spain as a whole.

Despite the welcome increase in new home building, the country is not building enough to meet the housing needs of a growing population. The Bank of Spain recently estimated that Spain needs to build half a million new homes before the end of 2025 to satisfy housing demand, but the country only started 57,000 new homes in the first half of 2024. At current levels Spain is a long way from building enough new homes, just like france.

Why are Spanish housing starts so low compared to demand? Red tape, high taxes, and rising construction, environmental, and financing costs are all helping to make new home building in Spain more difficult and expensive, which suppresses building activity, and feeds a housing crisis.

Explore the latest Spanish housing market numbers in the Data Hub.