Thursday, February 21, 2013

Cost of new-builds continues to rise

A recent article in the French LeFigaro newspaper notes that the price of new-builds rose by 7% in 2011 and a further 0.9% in 2012. New-build properties cost an average 15 to 20 per cent more to construct but continue to attract potential home owners and investors.

The reasons include owners' concerns about the continuing rise in energy and fuel costs, which some predict could be as high as 30% by 2017, and the feeling that it is wiser to invest in energy saving measures (insulation, heating systems, waste recovery etc) now rather than face higher costs some time in the future. Even in my local area on the Mediterranean coast south of Perpignan, holiday apartments dating from the boom years of 1960-70 are failing to sell, while two blocks of brand new apartments were sold out before even the foundations were laid.

Hower spokesmen both from the construction industry and estate agents argue that continually changing (and costly) building norms are helping to price properties out of reach of the average buyer, particularly when combined with new measures - some still to be announced - governing the taxation of second homes. France meanwhile suffers a serious housing shortage, despite the presence of around 2 million empty homes, and the government's pronouncements that it wants to do all it can to stimulate tye property market.

Source. 14 February 2013.