File - A general view shows rooftops and cranes on July 30, 2013 in Paris with the Eiffel tower (L) in the background. (AFP PHOTO / MIGUEL MEDINA)
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Strangled by regulation and high prices, weak French housing investment is proving a major drag on the eurozone's second-biggest economy as it struggles to stage a convincing recovery.President Francois Hollande pledged more than a year ago to slash red tape holding back construction, hoping to bring within reach an oft-repeated promise to build 500,000 new homes a year. But property developers complain that government measures since then have even discouraged home building and say they simply cannot make houses at prices would-be buyers can afford. According to statistics agency INSEE, household investment – primarily in real estate – slumped 2.6 percent in the first quarter from the previous three months. That was the biggest drop since the 2008 financial crisis and brought household investment to its lowest since mid-1999 . A 30 percent jump in prices over the last decade has made home ownership impossible for many even though the market has cooled over the last two years.Some 122,500 construction jobs – 8 percent of the workforce – have been shed since the financial crisis.
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