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The Loire prefecture offers some of the best rental yields in France, in a city with more than 25,000 students. Enough to attract investors to the cheapest metropolis in France, where property prices have plummeted for a decade. A slight upturn in prices and a significant rental demand which should not obscure the investment risks, as evidenced by the high rate of vacant housing.
A price of 66,000 euros for 75 m2, in a quiet area five minutes from the center. No, this is not an excellent life annuity deal in Lyon, but a transaction signed in early January for an apartment in Saint-Etienne. Just over 1,000 euros per square meter on average in the Loire prefecture, five times less than in Lyon and ten than in Paris. The Lyonnais are not mistaken: they buy from the Greens, worn by an upturn for six to eight months (+ 7.7% median price in 2019), in a city where the collapse of the past decade (-30% ) had caused the average price to drop below 1,000 euros per square meter.
An apartment for the price of a car
The opportunity is therefore still good to do great business, with studios at less than 30,000 euros. Far from the Lyon prices. Even the smallest portfolios can be an investor. “It is easier to buy a 2-room kitchen in Saint-Etienne than in Lyon”, pleonasm the president of Fnaim de la Loire, Guy Giraud. For a few thousand euros of work, however, because part of the park is degraded. “You have to count on 40,000 euros to buy and 20,000 of works, which will make the land deficit, to have a housing in perfect condition, which will rent well”, says the president of the Loire Chamber of Notaries, Me Alain Courtet.
20 times the yield of Livret A
With such low prices, the interest is obviously the rental investment in small areas. A segment that is on the rise in Sainté. “In 2019, there are had a big price increase on very small lots, of around 15% to 17%, driven by investors outside Saint-Étienne but from the Rhône-Alpes and Rhône markets ”, explains Guy Giraud, on the basis of figures from notaries. And Alain Courtet to underline “The attractiveness of rental investment in Saint-Etienne” : “Prices remain very low compared to other sectors. We are on a ratio of 1 to 4.5 with Lyon for the purchase but from 1 to 2.5 for the rental, therefore a doubled profitability for the lessor. With a key profit rate of 8 to 10%. ” At a time when the savings on savings fell further (0.5% for the Livret A from 1er February), Pierre Bazaille, of the Chamber of Notaries of the Rhône, can only underline the profitability of such an investment.
25,000 students to stay
You still have to find a tenant at your feet. However, with 12% of vacant housing in the city, there could be surplus supply. “We have a very relaxed market in Saint-Étienne, which creates the risk of having to wait a few weeks to find a tenant”, presents Guy Giraud. Real estate vigor requires demographic dynamism. The latest figures from INSEE (December 2019) note an increase in the number on this point. A reversal of the historic curve in the other city of seven hills, which now houses 174,520 inhabitants. The hemorrhage of the open population in the 1970s thus seems to have dried up, which its mayor, Gaël Perdriau, does not fail to emphasize.
“These new data confirm in a perennial way the positive trend that we know in recent years, with a growth of more than 2,600 inhabitants in five years, insists the councilor LR candidate for his re-election. There are also more and more students in schools in the city, not to mention the number of students, which has increased by some 12% in two years, reaching 26,400. ” Students who are obviously the main target of small-scale rental investment, even if colocation is on the increase. Investors will therefore target the neighborhoods close to the universities, the center and the tramway. With a question all the same, at the time of the merger of the Stéphane campus with the University of Lyon. The question of the sustainability of the property rebound, which poses a risk of capital loss, also remains pending.
[ArticleextractedfromtheRealEstatefileof[ArticleextraitdudossierImmobilierdeLyon Capital n ° 796 – February 2020]
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