Paris vs Lyon
Buying in a city can be a great investment and provide you with an exciting pied-à-terre – Emily Southcombe takes a closer look at the thriving property markets of Paris and Lyon
The south’s foodie capital squares up to the north’s City of Light
According to the UN’S World Tourism Organisation, France retained its position as the world’s favourite tourism destination in 2016 with 82.6 million visitors. While holidaymakers flock to seaside and ski resorts, the Loire Valley châteaux and historic monuments such as Mont St-michel, the nation’s cities are also a great draw. Offering culture, heritage, shopping, gastronomy and entertainment, they also present an interesting opportunity for property investors keen to tap in to their investment potential.
City of light Paris has always been the crowning jewel in France’s extensive tourist offering, and terrorist attacks have not stopped millions of tourists heading to the city. Having secured the 2024 Olympic Games, the City of Light certainly seems to be on the up. This is reflected in the year-on-year property price rise of 5.9% in the first quarter of 2017 in Paris, according to the Notaires d’ile-de-france. They report record numbers of transactions in the first quarter of 2017 and prices continuing to rise. From March to May, over 46,000 residential properties changed hands, a level of activity which has not been seen in the 20 years of records being kept.
A sign of the level of investment in Ile-deFrance is the huge infrastructure project known as Le Grand Paris Express, which represents 200km of new rail lines and 68 brand new stations, due for completion in 2030. This will increase the size of the city, taking pressure away from the centre, with the planned construction of a large number of new homes.
Paris is still a very dynamic market where properties can change hands quickly. Prices range from around €5,000/m2 in parts of the 18th arrondissement behind Gare du Nord to €38,000/m2 (and sometimes more) in parts of the 7th and 8th arrondissements around the Eiffel Tower and Champs Elysées.
As President Macron attempts to bring in radical changes and his popularity wains, it remains to be seen whether the levels of activity in the market will continue, but the ‘ effet Macron’ certainly has been positive so far. As Brexit runs its course, Paris and other major French cities should continue to benefit from uncertainty on the other side of the Channel.
Foodie capital In terms of population, Lyon is the third largest city after Paris and Marseille, while the Lyon metropolitan area represents France’s second largest economy. The city is the capital of the Auvergne-rhône-alpes region, home to many of the most sought-after ski resorts. It has a strong industrial base – Renault Trucks’ production plant celebrated its 100th year in Lyon in 2016 – but also boasts UNESCO World Heritage sites. It’s now directly accessible from London by TGV with the fastest journey time being four hours and 41 minutes while many airports around the UK offer direct flights to Lyon. The Economist recently put it at 29th position in its global ‘liveability’ rankings.
Known as the gastronomic capital of France, it is home to Les Halles de Lyon, a famous indoor market and eatery. French chef Paul Bocuse learnt to cook in the city’s famous ‘ bouchon’ restaurants, which serve traditional homemade food using local produce. These were set up by the ‘ Mères’ (mothers) who, after losing their housekeeping jobs between the two world wars, decided to set up their own restaurants. Many can be found in the old town among a maze of winding streets.
The Part-dieu area of the city surrounding the TGV station is a modern business district with lots of ongoing construction and a large shopping centre which is home to the Galeries Lafayette department store.
Prices in Lyon start from around €2,000/m2
in less sought-after areas on the outskirts of the city to €9,500/m2 in the 3rd arrondissement, close to the Part-dieu shopping area and Les Halles de Lyon, and the old town in the 2nd arrondissement. Prices are heating up in the Confluence area at between €3,000-€7,000/m2 for an exceptional property.
There are a number of noticeable similarities between Paris and Lyon. Both cities are landlocked, and from the architecture to the metro and tram systems, there is a familiar feeling to Lyon for those who love Paris.
Tech talk President Macron is keen to lure innovative companies to France and both Paris and Lyon have vibrant tech communities. Known as Station F, the world’s biggest start-up campus opened in June this year in the 13th arrondissement of Paris and will be home to more than 1,000 start-ups. Founding partners include Facebook and Microsoft.
Lyon is a pioneer of the government’s French Tech initiative with 7,000 digital companies based there; the former Halle Girard is being renovated to provide a home for Lyon’s French Tech organisation and a venue for stakeholders in the digital sector. The district of Confluence, whose museum received record numbers of visitors in 2016, is an up-and-coming area which is undergoing development and sees itself as the Silicon Valley of greater Lyon.
Rental options The Paris authorities are increasingly cracking down on online short-term rental companies and their effect on the hotel industry and housing shortage. The so-called ‘ Décret Airbnb’ comes into force on 1 December 2017, meaning people letting spare rooms through the company will have to register with the Paris council. Such measures are also on the horizon in Nice and Bordeaux, and Lyon may follow suit. So, with potentially increased paperwork and pressure on the short-term rental market, it’s a good idea to look at other rental options.
Both Paris and Lyon are home to some of the country’s top universities with large student populations, so if you aren’t intending to use the property yourself, student lets are another shorter-term rental option. However, you could consider long-term rentals which should be less cyclical.
Both Paris and Lyon have a huge amount to offer potential purchasers looking for a city bolthole. Those who wish to escape wet weekends in the UK for easily accessible cultural breaks will not be disappointed with what is on offer in either city.
There is plenty of investment opportunity for most budgets in both cities and the horizon for capital gains is positive. Rental yields depend on the size, location and style of the property and preferred rental method, and management costs of potential apartments are worth factoring in early in the search process.
Both Paris and Lyon have a huge amount to offer potential purchasers looking for a city bolthole – those who wish to escape wet weekends in the UK for easily accessible cultural breaks will not be disappointed
The National Library in the 13th arrondissement
Lyon from the top of Notre-dame de Fourvière
Lyon’s Confluence district