Redcon Property Development

Impact of Gautrain Stations on property prices

The proximity of Gautrain Stations will increase neighbouring property prices. The reasons for this price increase is proven by similar projects elsewhere in the world.

We have case-studied 5 separate countries: USA, Holland, India, Canada and Chile. It must be noted that there are significantly more examples of this price increases.

Study 1: 

Impact of Proximity to Light Rail Rapid Transit on Station-area Property Values in Buffalo, New York

By: Department of Urban and Regional Planning, University at Buffalo, State University of New York

Result:

The model suggests that, for homes located in the study area, every foot closer to a light rail station increases average property values by $2.31. Consequently, a home located within one-quarter of a mile radius of a light rail station can earn a premium of $1300-3000, or 2-5 per cent of the city’s median home value.

Reference:

Study 2:

Impact of railway station on Dutch residential housing market

By: Vrije Universiteit Amsterdam

Result:

Applying a cross sectional hedonic price model, we found railway stations as identified by frequency of train service has elasticity of close to 0.3 for house up to a distance of 3 kms. (In ordinary language, that could result in an increase of up to 30% in house prices up to 3kms.)

Reference: http://ideas.repec.org/p/wiw/wiwrsa/ersa05p748.html

Study 3:

Impact of the Delhi Metro on real estate prices

By: Centre for Environment Planning and Technology (CEPT) in Ahmedabad

Result: In residential areas, land value within 500 metres of the Metro line increased by 11.3 per cent on average. In commercial areas, the land value within 500 metres increased by 18.1 per cent.

Reference: http://www.iutindia.org/urban09/041209/H.M.Shivanand%20Swamy.pdf

Study 4:

The Effects of a New Subway Line on Housing Prices in Metropolitan Toronto

By: Saint Mary’s University, Halifax, Nova Scotia, Canada

Result: Empirical results indicate that the direct savings in commuting costs have been capitalized into housing values.

Reference: http://usj.sagepub.com/cgi/content/abstract/20/2/147

Study 5:

The Anticipated Capitalisation Effect of a New Metro Line on Housing Prices in Santiago, Chile

Result:

Housing units with closer access to public transportation enjoy a higher market value than those with similar characteristics but poorer access. This difference can be explained by the lower cost of transport to the main workplaces and shopping areas in town. For this reason, investments in public transport infrastructure, such as building a new metro line, are capitalised totally or partially into land and housing prices.

Reference: http://www3.interscience.wiley.com/journal/120695438/abstract