Lyon, exemplary development
By Laetitia Rossi - 10 February 2012
On the confluence of the Rivers Rhône and Saône, the upper middle-class town of Lyon began to revise its proposals from the 1980’s onwards. Following the decline of its textile industry, it turned its attention to petrochemicals, pharmaceuticals and biotechnologies. Very lively, this second largest student centre in France now offers an attractive image, for both private individuals, companies and investors.
The prefecture of the Rhône region is home to 479,800 residents. The words of Albert Thibaudet say a great deal about its role at national level : “If Paris is the capital of France, Lyon is the capital of its provinces”. The city’s architectural heritage recalls its long history, from Roman times to the modern day. The Old Town, Presqu’île, hillsides of Croix-Rousse and the hill of Fourvière are listed as part of UNESCO’s World Heritage. Based on an economic boom, Lyon’s expansion policy is clear to see. Proportionately, its population growth is one of the highest in Europe. The inauguration of the Tour Oxygène in 2010, 115 metres tall, and the project for Incity, a tower that could well attain a height of 200 metres in 2013, are already strong indicators of the town’s development. As is the construction of the neighbourhood of La Confluence. The average income of the Lyonnais is much higher than the national figure. And its bourgeois tradition is deeply anchored.
“After a particularly buoyant month of November, both transactions and new offerings on the market quietened down until mid-January, then picked up to attain a very satisfactory cruising speed,” say Thierry Pointu and François Faure, respectively Transactions Manager and General Manager of Sud Transaction/assistant to the director of Métier d’Urbania. The market is, in fact, both stable and highly-prized. In view of the city’s economic dynamism, prices remain reasonable. The sq. metre is pegged at around 3,100 € on average, versus 7,000 € in Paris. In concrete terms, this means it represents only 40 % of the rate practised in the capital. Furthermore, the prices posted correspond to buyers’ income, without their necessarily having to pay a significant amount of cash in order to secure their purchasing plans. At Urbania, a firm composed of sales, management, rental and property agent departments, the majority of transactions are concluded in the category of small surface areas priced from 70,000 to 130,000 €, and 2 bedroom apartments ranging from 175,000 to 250,000 €. The former are sought by young buyers or investors. Commercial premises also have their fans. They bring a gross yield of 5.5 % if they benefit from a prime location, 7 % for a more standard setting, while the gross return on residential investments is close on 5.5 %. These buyers, from within the region, accounting for 20-25 % of the total clientele, are usually over 40 years old and have paid off a good part of their main homes. First-time buyers, also representing 20-25 %, are currently not so much in evidence. Disadvantaged by the suppression of the PTZ and the return to drastic mortgage conditions, they can only afford to pay from 90,000 to 250,000 € for a home. The second half of the clientele, working families and senior citizens, swap their apartments for houses, or vice versa. Within the city, they are drawn to recent residences or handsome old apartments, generous volumes and select addresses. Most of the sales transacted by Urbania concern the 8th, 3rd, 7th and 4th “arrondissements”, as well as Villeurbanne. In the 6th and 2nd districts, demand is strong but supply extremely limited.
“2011 saw a lot of movement due to the announcement of the new legislation on capital gains,” comments Jean-Paul Veloso of the Akerys agency. 1- and 2-roomed apartments costing from 60,000 to 140,000 € are of interest to young first-time buyers and investors. There is also a lot of demand for 2- and 3-bedroom apartments intra-muros, priced from 200,000 to 300,000 €. Not forgetting houses of 100-120 m2 with gardens of 600-800 m2 on the first ring around the city, selling from 300,000 to 400,000 € to the east and south, and starting from 350,000 € to the west. The excellent activity in real-estate investments is partly explained by disaffection with bank instruments and the stock market. This trend should be confirmed in 2012, with purchasers capable of paying cash. Jean-Paul Veloso also casts a serene eye on the position of executives and senior executives, already owning assets and benefitting from good borrowing capabilities. The coming period will undoubtedly be less favorable for first-time acquisitions. Nevertheless, Lyon is a highly-prized market, seen as a safe haven.
“The Agence Mercure Rhône-Alpes specializes in apartments and properties of character, whatever their size or price, without any noise or eye-sores,” explains Nicolas Devic, its managing partner. Over and above 2.5 million euros, it becomes very hard to convince potential buyers. It is even difficult to find takers for houses above 1 million euros, whereas apartments are making more headway. Desirable examples can attain 5,000 €/m2. Cours Franklin-Roosevelt, Avenue Foch and Avenue de Saxe, Place Lyautey and the riverbanks, in the 6th, Ainay, Place Antonin-Poncet and Place Bellecour, in the 2nd and the plateau of La Croix-Rousse, in the 4th, are all highly sought-after. In 2011, the agency handled the sale, at prices of 1.1 million euros and more, of three restored apartments of over 250 m2 on upper floors, facing south or west, with parking facilities, in the 6th and 2nd “arrondissements”. Demand on the part of young executives, families and retirees for apartments from 50 to 120 m2 outstrips supply. Fairly estimated, they sell within two weeks of appearing on the market. The time it takes to sell is, in fact, a good indication of whether the estimate corresponds or not to prevailing market values.