Real estate and MoveOntario 2020

We can say without any doubts that city transportation system is one of the elements that helps to create the city image. Population explosion in the last four decades, multiplying almost five times since 1970, has been the most important reason why our transit system is no longer able to satisfy the demands. Yes, there have been some improvements in the past years, but mostly minor, offering only provisional solutions. However, in the following years, the character of transportation in south Ontario will be totally changed by a project known as The Big Move.

MoveOntario2020 is the name of the key part of this overall transportation outlook. Published in June 2007, it is now widely expected by public (and we can just guess how much this contributed to liberals’ reelection in October). This plan comprises of 52 projects, which should run till 2020, and with expected costs no less than $17.5 billion ($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

The housing market in Toronto is a very complex industry and can be influenced by many different elements, either only a little, or the impact may be bigger. It may often be difficult to identify the effect of a specific change in the local or global economic environment, but clearly there are some factors that are more important than other ones. One of the key elements is the transit system.

You all can picture the way in which transit system positively affects the quality of living. For example, it can decrease the direct costs of commuting, indirect costs of time consumption, easier access to public facilities or better environment with cleaner air, while the negative aspects are only minor and short-term.

Many research reports have been written, focusing on the quantification of the impact of different transit system improvements. For example a research paper from Tinbergen Institute (dealing with railways only) the positive impact of railway accessibility on home value reaches around 25%. Just a simple doubling of public transport frequency increase means average 2.5% price increase for every home in the region – just one year after the works are finished.

MoveOntario impact on the real estate in Toronto in upcoming years

We can establish the expectations on recent study made by REIN Canada. Rail commuting system is one of the key ways to lower the time people need for commuting. In Toronto, we have the underground and GO Train system.

This kind of system has a positive impact on areas about 800m around from each station, with value maximization in 500m range. The areas that are impacted the strongest are older neighbourhoods or areas where people earning less money live. Neighbourhoods around Spadina and Younge subway lines extensions in Toronto can be named as examples of the effect on home prices. The GO Train project is more complex, the capacity should be improved in 17 projects including building new lines and/or extending the old ones, and there are 9 more projects concerning the GO Bus Rapid. Analogous effect will be caused by new light train transit lines, involving Waterfront and Eglinton neighbourhoods.

Conclusion

In this short article, we cannot analyze 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. Coming next should be the areas of Milton, Brambton and Uxbridge&Stoufville, these will also enjoy high influence. In these areas, we can await the prices to rise by 10-20%. The third group is represented by all Toronto areas which lie along the new lines or along the old lines, which capacity will be increased. Positive effect on real estate prices should occur 1-3 years after the particular project is finished.

And that was still not the end. With more neighbourhoods being easily accessible thanks to the new transport system, also the quality of life near the old parts will be better. MoveOntario is supposed to create around 175 000 jobs – again, this can have positive effect on real estate prices in the Greater Toronto. More people, more investors and more business are going to be attracted with our well working transport system. The whole Toronto is going to profit and real estate values on the whole Toronto real estate market may be positively influenced for the next decades.