Focus on Property in Lyon: 2016 Performance and 2017 Prospects
2016 was a great year for property in Lyon, with prices and investment up in almost all of its arrondissements. What does 2017 hold for the city, and where should you look to buy?
Property in Lyon performs well in 2016
The capital of the Auvergne-Rhône-Alpes region and third largest city in France with a population of half a million, the city performed almost as well as Paris last year. Old-build apartments – the bulk of market property in Lyon – saw price growth of 4.4%, while Meilleursagents.com reports that property in the city grew 6.6%.7 out of 9 of its arrondissements appreciated in 2016 and the last quarter saw 0.6% more transactions than the previous, the market finishing on a high.
The strongest performer was the 6th arrondissement, prices up an astounding 9.4%, now at €4,935/m2; the 3rd almost equalled this growth, now at €3,864/m2, 8.9% higher than the end of 2015. However, Lyon’s highest prices are to be found in its worst-performing borough, the chic 2nd arrondissement’s average price/m2 standing at €5,057, after a 5.6% fall over the year.
Lyon’s metropole has a median monthly rent of €11,10/m2, with Lyon proper fetching €11,70/m2. Individuals pay more (+€0,50/m2) renting directly from a landlord rather than through an agency, which is the case in 3 out of 5 leases. High construction as part of a Greater Lyon project has helped prevent an inflation in rents.
Commercial property also had a great 2016. By the end of the year, estimates of total investment in office space are 800 million euros. Half of investment in the French office property market in 2016 went to Lyon, with 85% 0f deals worth over 15 million euros taking place in the city’s metropolitan area.
What does 2017 hold for property in Lyon: where to buy?
Two things to look out for: the French election and interest rates. If Fillon wins and is true to his word we could see the capital gains tax waiver period reduced to 15 years, which will further encourage property investment. Keep an eye on the Trump administration and the European Central Bank to anticipate moves in interest rates.
When looking to invest in Lyon, one should see how arrondissements are performing. The 6th is the fastest growing, but its prices are close to becoming the most expensive in the city. Avoid the 2nd and 8th arrondissements, where prices are down. The 3rd, 7th and 9th arrondissements have both low prices and steady growth, making them ideal investment targets. The infographic on this page is a useful tool.
With the recent news that Lille will be following Paris’ suite and adopting rent caps, some might wonder if other big cities like Lyon are considering the same. Thankfully, this is not on the cards for the moment. Michael Le Faou, of the National Observatory of Rents in Lyon, recently reassured investors that the current policy of building homes is the city’s means of controlling rents.
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