Shorter commuting time drives demand and fuels higher prices, real estate consultants say
Derrick Penner
Sun
The Golden Ears Bridge as seen in a rendering as part of the Gateway project. Photograph by : Vancouver Sun, Courtesy photo
Highway improvements and new rapid transit lines will increase property values by 10 to 20 per cent in six areas of the Lower Mainland, says a report by the Real Estate Investment Network, a consulting and research firm.
Don Campbell, REIN’s president, called it the “Gateway effect” — a reference to the $3-billion program to widen Highway 1 and build new truck routes.
“In a nutshell, [it] is about accessibility and demand,” Campbell said in an interview.
Maple Ridge-Pitt Meadows, North Langley-Abbotsford, Port Moody-Coquitlam, Surrey-Delta, Mission-Chilliwack and areas of Richmond and Vancouver will see real estate values rise as the communities become easier for commuters to reach, Campbell and co-author Russell Westcott said in a report to be released today.
Campbell said people measure commuting distance in minutes, not in kilometres. “So as soon as you open up accessibility to a region, demand [among] people wanting to live there skyrockets.”
The $1.9-billion Canada Line SkyTrain route will make it easier for commuters to get from Richmond and south Vancouver to downtown Vancouver. The Evergreen Line will help improve downtown access for people in Port Moody and Coquitlam.
The Gateway program includes twinning the Port Mann Bridge, widening Highway 1 and building perimeter highways on the north and south sides of the Fraser River. The aim is to reduce congestion, speeding the flow of commuters and trucks.
Property values, Campbell said, should increase 10 to 20 per cent on top of whatever the average appreciation rate is in areas of those communities.
If property values fall, the report says, real estate that has the “Gateway effect” advantage, should retain 10 to 20 per cent more of its worth.
Campbell, an adviser to real estate investors and an investor himself, factored the experiences of other North American cities with major transportation improvements into the assessment.
He said property values near commuter routes, such as San Francisco’s Bay Area Rapid Transit and Toronto’s Go Trains, experienced increases of 10 per cent within about 500 metres of the major stations.
Campbell added highway improvements he studied increased property values up to 20 per cent for commercial property within a kilometre of highway exits and more than one kilometre for residential property.
And while Campbell said some of the Gateway “premium” might already be in the real estate market due to speculative purchasers, he does not expect the full increase to be reached until after new routes or improvements are complete.
“Once the work is done, then the [improved accessibility] occurs and people start to make it real in their heads,” Campbell said. “The general population doesn’t make its move until the project is complete.”
© The Vancouver Sun 2006