Since the municipal elections of 2020, the real estate landscape of Lyon has transformed immensely. Two major periods stand out according to an article from SeLoger. The first, from 2020 to 2023, reflects a market fueled by historically low interest rates, hovering around 1%, in a national context where real estate transactions reached nearly 1.2 million sales. The second phase starts from 2023 with a rapid rise in borrowing rates, now flirting with 4.2%. This shift has profoundly changed the rules of the game. As a result: apartment prices initially increased before experiencing a significant correction.
Between 2020 and 2023, prices in A Different Evolution from Paris
In the analysis of the French real estate market, Paris stands out as an exception. The capital experienced a turnaround as early as summer 2020, even though interest rates remained very low. In contrast, Lyon followed a different timeline. The drop in prices only occurred when borrowing rates started to rise significantly. Before that, the city was still benefiting from...a strong appeal, fueled especially by the rise of remote work and the search for more spacious housing after the health crisis. This phenomenon has led many households to leave large capitals to settle in dynamic metropolitan areas like Lyon, while still maintaining professional activity sometimes at a distance.
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The purchasing power for real estate measures the number of square meters a household can acquire by spending about 35% of its income on repaying a mortgage. In Lyon, this indicator rises from 49 m² in 2020 to 52 m² in 2026. That’s an increase of 3 m², which might seem surprising given the context of more expensive loans. The explanation is quite simple: purchasing power depends on rates, prices, and incomes. While the rise in rates reduces borrowing capacity, the drop in prices seen since 2023 and the growth in incomes have partially offset this effect. Over the last five years, incomes have increased by about +22% on average, while the real minimum wage has gone up by nearly +18% over six years. These changes help maintain a certain balance in borrowing capacities.
purchase.
Rental power is increasing too
Rental power measures the area a household can rent by dedicating about a third of its income to rent. In Lyon, rents have increased by +5.5% between 2020 and 2026. They rise from about €16.4 per m² to €17.3 per m². The increase remains quite moderate during the first period (+0.8% between 2020 and 2023) but then accelerates with +4.7% between 2023 and 2026. At the same time, rising incomes allow for an increase in accessible rental space. Thus, rental power goes from 65 m² to 76 m² during this period, meaning an increase of about 10 m² for a typical household.
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It's also important to note that rent control has been in effect in Lyon since 2021. However, the evolution of rents also depends on many other factors like the availability of housing, rental demand, and residential mobility. While the real estate market in Lyon has changed since 2020, the metropolis has lost none of its appeal. The big difference now lies in the central role of financing.
The shift from rates close to 1% to around 4.2% has significantly changed buyers' strategies across France. In Lyon, this change has led to a more balanced market where buyers are taking more time to compare.
and to manage their projects. Local communities can influence certain parameters—urban planning, housing construction, transportation, or attractiveness—but the determining factor today remains the cost of credit.
Source: SeLoger