Friday, October 30, 2009

France needs to build 500,000 new dwellings a year

In a recent interview with Capital magazine, Alain Dinin, MD of the French construction group Nexity, agreed with the government's view that France needs to build at least half a million new dwellings annually to cope with demand resulting from the country's population increase and the rise in divorce and newly re-constituted households. Of these 140,000 would be in apartment blocks and the remainder divided between individual dwellings and social housing.

Nexity is one of France's largest developers, and as Dineen points out, has managed to survive the current slowdown as a result of the France's policy of selling at least 50% of each new development before even the foundations are laid. This, he notes, is in contrast to the position in Spain where speculative blocks have been built before a single apartment was marketed or sold, leaving the country with a glut of empty high rise buildings. 'In France, we only sell off-plan in the case of new build properties' he stresses.

Dinin estimates that the 2009 will see around 90,000 order's for new-build dwellings, just 10,000 ahead of 2008, but less than the 127,000 sales recorded in 2007.

Although the government has set targets for annual energy consumption to be reduced to 50kW/m² per year (against today's 150), Dinin argues that these changes will take time as manufacturers develop bew building materials and construction methods, citing the end of 2012 as a reasonable timescale for implementation. He notes however that France has been relatively slow in building newstyle eco-homes and cites a recent visit to Lille to open six new buildings, which was followed a few days later by a trip to South Korea where 15,000 new energy saving homes were launched onto the market.

Dinin also notes that while 77% of French people already live in towns, they will be forced to travel longer distances to and from work - creating an extra cost burden for infrastructure - if too many people choose to live in a typical house-with-a-garden in the subsurbs, as opposed to a multi-occupancy apartment block. Given the high cost and scarcity of land aroound France's major cities, building apartments he argues is an more cost effective solution to the country's housing problem. With restrictions on building more than five storey's, Dinin points out that with ten storeys, you could double the number of apartments, on the same amount of land!

Source: Capital, November 2009 pp 7, 9.