France – Housing Starts are back to 1998 level – Housing crisis

The chart below shows housing starts in France since the beginning of 1995. The sum over 12 months is at 312 000 in May 2014 and can be compared to the level seen at the end of 1998.
This chart shows the housing problem in France. After a strong period in 2003 – 2007 and robust but unsustainable tax incentive period in 2010/2011, housing starts are back to their long-term trend (between 300 000 and 350 000 per year). This has to be compared to French population. Between January 1995 and May 2014 it has grown from 59 281 000 to 65 906 000. Between 1990 and 2010 the households’ number went from 21 942 000 to 27 715 000.
With these figures in mind, are you surprised by the housing crisis in France? Too many people, too many households for the number of new houses.
The target of 500 000 that was announced by the former Housing Ministry, Cécile Duflot, in 2013 is still too far from being reached.
Going a little deeper in the housing market, we see that there is still a strong demand  for large cities, in fact where there are jobs (Pars, Lyon, Toulouse, Lille and few others). But for these cities the land price is very expensive, so are houses. In other regions, the job momentum is weaker and demand is low. For at least for the last 40 government policies had a target in terms of geographical planning. It has been a failure and the result is this large imbalance on the housing market.

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