New transit lines will drive house prices- Article on The Toronto Star

New transit lines will drive house pricesResale values can jump 20% with expansion of transportation routesMay 7, 2008Tony WongBUSINESS REPORTERhttp://yourhome.ca/homes/article/422263The proposed expansion of the Toronto Transit Commission's Spadina line to Vaughan will be a major catalyst to population growth, driving up resale values by as much as 20 per cent in neighbourhoods along the new corridor, says a new study."After so many years, it's exciting to see so much attention being given by the federal and provincial governments to building infrastructure and transportation in the GTA," analyst and study author Don Campbell said in an interview.In the 27-page report released yesterday, the six-station expansion of the TTC's Spadina line is the top choice to benefit from future transportation changes in the Greater Toronto Area."Accessibility is a critical determinant of residential land values and the improved access between urban centres and residential neighbourhoods greatly improves the value of homes," says the study, The GTA Transportation Effect, which looks at how transportation changes affect housing values.The TTC plans to build new stops, starting with an extension to York University and ending at Vaughan Corporate Centre by 2014.Campbell estimates the biggest impact would occur within an 800-metre radius of planned stations."Commuters will begin to discover the convenience of the area and therefore increase demand on properties in the region," says Campbell, president of the Vancouver-based Real Estate Investment Network, and author of Real Estate Investing in Canada.Demand will drive growth in the area until 2020 (five years past the completion date of the stations), Campbell forecasts. The region near Sheppard West station will see particularly strong demand because of the planned TTC station and the potential for a GO train stop in the area, says the report."In the future, these areas will outperform the rest of the region. If the market goes up everywhere, these areas will increase by 10 to 20 per cent or more. If values in the GTA drop, these will drop by 10to 20 per cent less," forecasts Campbell.Campbell said he doesn't own property in the area, but will be looking this week for multi-residential units as an investment.Access to transportation is just one of many real estate criteria used to determine value, but it is becoming increasingly important as highways grow more congested and gas prices increase."Distances are now measured in minutes, not kilometres," says Campbell. "Choices will increasingly be influenced by time and accessibility."To bolster his argument, Campbell quotes heavily from American studies that show proximity to transit can increase housing prices. In Los Angeles, properties located within 400 metres of a rail station enjoyed premiums of $31 per square foot, he said. The earliest Canadian study quoted is from the 1980s, and it concluded there was a willingness to pay more for homes near commuter lines, but did not put a price on the convenience.There was also a potential negative effect in some areas that were too close to transit lines, resulting in a drop in property values because of noise, increased traffic and potential crime.Last year, the provincial government unveiled its MoveOntario 2020 program, which looked at long-term planning for transportation in the province.In addition to the planned Spadina expansion, an extension of the Yonge St. line beyond Finch to Steeles Ave. and into York Region is also on the drawing board, as is an extension of the Scarborough line from McCowan station to Sheppard Ave.Campbell says this will buoy values in those neighbourhoods.Meanwhile, areas outside Toronto will also benefit. The return of an expanded Go Train service to Barrie, as well as the proposed expansion of Highway 427 from the Pearson airport area to Barrie, should help housing values in the area, the report says.And the addition of the Lisgar station in Milton and a future park-and-ride Lincolnville Go station outside Stouffville, will also increase demand for property.Toronto Star