We can say without any doubts that city transportation system is one of the attributes that helps to create the city portrait. In the last four decades, Toronto has gone through a population explosion: nowadays it has almost five times more inhabitants than in 1970. That’s why our transit system needs to change in order to be able to meet the changing demands. Only improvised solutions have been provided by a number of minor improvements in the past. A project called The Big Move, starting in the following few years, has been planned to totally improve the transportation in south Ontario.
MoveOntario2020 is the name of the key part of this overall transportation outlook. Published in June 2007, it is now broadly expected by public (and we can just guess how much this contributed to liberals’ reelection in October). $17.5 billion is the total budget set apart for the 52 projects of the whole plan ($11.5 billion covered by Ontario’s budget). 1. GO Transit upgrades and extensions; 2. Major municipal transit expansions; 3. Cross-boundary subway expansions; and 4. Rapid-rail link between Toronto Union Station and Toronto
Real estate and transit system
There are a lot of attributes that influence the sensitive mechanism of Toronto’s property market, which makes this matter quite complicated. Even though we can’t always separate the effect of a particular change in the local or global economic environment, but some of them are more significant than others. One of the most important attributes is the transit system.
You probably have an idea about the relevance of the transit system for the good quality of living. For instance, the direct expenses on commuting are lower, just as indirect expenses such as time consumption. Furthermore, we can mention easier accessibility of public facilities or cleaner air and generally healthier environment, whereas there only a few minor negative short-term aspects.
Many research reports have been written, focusing on the quantification of the influence of different transit system improvements. For example a research paper from Tinbergen Institute (dealing with railways only) the positive influence of railway accessibility on home price reaches around 25%. If the public transport frequency improves twice, it causes 2.5% price growth for all homes in the region – just a year after finishing the works.
How will MoveOntario influence the real estate in Toronto in the future?
We can base the expectations on recent study made by REIN Canada. One of the most important methods of lowering the commuting time is a rail commuting system, which in Toronto is represented by subway and GO Train system.
The positively affected areas lie in about 800m range from each station, with price maximization in 500m range. More areas affected are older neighbourhoods, likewise areas inhabited by citizens with lower average income are again more. Neighbourhoods around Spadina and Younge subway lines extensions in Toronto can be introduced as examples of the effect on house prices. The plans concerning GO Train are more complicated, with 17 projects of capacity extension, new lines and/or lines extension, and 9 other projects of GO Bus Rapid. New light train transport lines in the neighbourhoods of Waterfront and Eglinton will have a similar effect.
Conclusion
In this brief article, we cannot describe in detail the whole mechanism how MoveOntario 2020 will influence the Toronto real estate market. According to REIN, the most positive effect will be on areas around Vaughan, Scarborough and Barrie. Milton, Brambton and Uxbridge&Stoufville are in the second group of areas that will be strongly influenced. The property prices are expected to increase by 10-20% in these regions. In the third group we can put all Toronto areas in the vicinity of the new lines, or old lines with plans for improving their capacity. Positive effect on real estate prices should be visible 1-3 years after the particular project is completed.
And that’s not all. With more neighbourhoods being easily accessible thanks to the new transport system, also the quality of life near the old parts will be better. Another positive effect on the property prices in the GTA is expected to come from the 175 000 jobs which should be created by MoveOntario. With well-working transport system we are going to attract more inhabitants, more investors and more business. For the next decades, we are expecting the property price growth in the Toronto market, as the whole region is going to profit from the new transport system.
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