The number of new homes under construction in France fell by 19.6 percent last year from the level in 2011, data released on Tuesday by the housing ministry showed.
The number of housing permits for new homes slipped by 7.7 percent to 429,851 units meanwhile for the eurozone's second biggest economy.
The trend deteriorated sharply in the fourth quarter, when the number of homes under construction fell by 30.1 percent and permits dropped by 24.8 percent, whereas they had not fallen by more than 1.9 percent in any of the preceding three quarters.
On a sliding 12-month scale, the fall in housing starts to the end of December was the biggest since September 2009.
The French economy in general ended 2012 on a weak note, and in the construction sector, loans for French housing plunged by an annualised 26.4 percent despite ultra-low interest rates.
The French government has forecast economic growth of 0.8 percent this year, but that figure might be revised lower, while a new International Monetary Fund estimate puts French growth at 0.3 percent.