Location is still of prime importance in real estate – and these days that can be as much about proximity to reliable public transport as it is about the safety and security of the area, easy access to shops and good schools, and the steady appreciation of home values.
“Several overseas studies have shown that home values tend to rise faster in areas close to bus, train and underground stops, and now we can see that the same thing is happening in South African suburbs served by our new transportation networks, and especially those areas that boast a Gautrain station,” says Tony Clarke, Managing Director of the Rawson Property Group.
Last year, the London Telegraph reported that homebuyers in London, Manchester and Glasgow are prepared to pay premiums of up to 10.5% for homes located within 500m of an underground, train or tram station compared to identical homes located 1,500m or more from a station.
According to a survey conducted by the Nationwide Building Society, which is one of the UK’s biggest mortgage lenders, the difference was most marked in London, where homes located less than 500m from a station now sell for about GBP42,000 (or about R756,000) more than similar homes located at the 1,500m mark.
In Manchester, the premium on a typical property located within 500m of a public transport stop is 4.6% (equivalent to about R149,000), and in Glasgow, it is 6% (or about R169,000).
A year earlier, a study commissioned by the American Public Transportation Association and the National Association of Realtors (NAR) identified a similar pattern in the US, with the values of homes within half a mile of public transport stops performing 41% better, on average, than homes outside this radius over a five-year period.
NAR chief economist Lawrence Yun said at the time that this trend was likely to continue, with transportation considerations playing an increasingly important role in home purchase decisions due to buyers’ growing preference for shorter commutes and more walkable neighborhoods.[clickToTweet tweet=”It is clear that buying a home within reach of a bus or train station is a good investment now and in the future.” quote=”It is clear now that buying a home within reach of a bus or train station is a good investment & likely to become an even better one in the future.”] This preference was most noticeable, he said, in cities like New York, where apartment prices on the Upper East Side, for example, decrease by between 15 and 20% for every block away from the subway.
However, even in cities such as Phoenix, which is really not known for having great public transport facilities, and was really badly affected by the 2008 real estate crash, the study found that homes close to bus lines and light rail transit stations had held their value much better than those further away from such facilities over the five-year period.
Meanwhile in Gauteng, it has been five years since the first Gautrain stations were opened in time for the Soccer World Cup, and it is very clear how, in line with the international trends, the values of homes in the areas around the stations have been boosted relative to those further away, Jacobs says.
For example in Sandown, the average price of sectional title apartments within walking distance of the Sandton station has risen by more than 96% since 2010, while the average price of similar apartments in the neighboring suburb of Rivonia – a short bus ride away from the station – has risen by just 59%.
Similarly in Pretoria, the figures from property data company Lightstone show that the average price of flats close to the Gautrain terminus in Hatfield has risen by 33% in the past five years, while that of similar flats in neighboring Arcadia has risen just 11%.
And, he notes, the story is the same in Centurion, where the average price of sectional title units close to the Gautrain station has risen by 26% in the past five years, and in Midrand, where the average price of sectional title homes in Halfway House has risen by 21%.
Then in Johannesburg, flats close to the Gautrain terminus at Park Station have achieved an average price growth of 59% since 2010, while prices of flats in Braamfontein and Hillbrow have risen by an average of 29%.
“But it is in Rosebank that the coming of the Gautrain has had the most marked effect,” says Clarke. “The average price of sectional title apartments here has shot up by almost 200% in the past five years, while the increases in the surrounding suburbs over that period range from 14% to just under 50%.”
“It is thus very clear now that buying a home within easy reach of a bus or train station is a good investment – and likely to become an even better one in the future.”
This article “Higher Home Values Due to Proximity to Public Transportation” was issued by Rawson Property Group SA – http://www.rawson.co.za/