The expansion of the Gautrain rapid rail network is no longer just a long-term transport proposal. The routes for additional lines and the locations of new stations have finally been gazetted, adding a significant new factor to the property equation for those who own homes near the new transport corridors.
That’s the word from Stephen Whitcombe, MD of the FIRZT Property Group, who notes that many residents of Sandton, Randburg, Cosmo City and Little Falls will be affected by Phase 1 of the expansion plan – and could feel an impact much greater than shorter commuting times. “Meta-studies of the effect that rapid rail or bus transport corridors have on property values have all shown that improving the availability of such public transport can significantly increase property demand and values.
“However, it must be said that the effects can vary widely, depending on location and the proximity of homes to a station, as shown by research done after the completion of the initial Gautrain routes. This study covered Sandton, Rosebank and Midrand and found the strongest ‘proximity effect’ around the Sandton station. Between 2006 and 2015, average selling prices of homes within 1km of Sandton station were 38% higher than those 1km to 2km away, and 91% higher than those 2km to 3km away. Midrand showed a smaller positive effect, while Rosebank actually showed little difference between the zones.”
Meanwhile, he says, a huge international meta-analysis of about 200 separate studies found that homes within about 400m of a rapid rail or bus station were only worth 4,2% more, on average, than comparable homes further away.
“The good news is that this impact on home values can occur even before new routes and stations are built. In fact, research in Hong Kong and London showed premiums emerging shortly after network improvements were announced.
“But the key lesson is that proximity alone does not guarantee a windfall – unless the province needs to expropriate your home to make way for a new line or station. The greatest benefit is usually to be found where properties have convenient access to a station without being exposed to excessive noise, construction disruption or other infrastructure impacts.”
So what should homeowners in the Phase 1 areas do? Whitcombe has the following advice:
* First check the exact route plan as soon as it is finalised. Determine whether your property is near a proposed station, close to the route, or directly affected by construction.
* Watch local planning: Monitor zoning changes, municipal applications and proposed residential, retail and mixed-use developments around future stations.
* Avoid overpricing: Buyers may value future connectivity, but you should ask a property professional for information about recent comparable sales to show whether the market is already paying a premium.
* Consider the long-term effects: The strongest benefits may only emerge as the new stations attract new office, retail, housing and other investments.
* Maintain your property: A well-presented home in a well-connected location is more likely to benefit than a property relying on the route alone.
In addition, he says, homeowners should generally avoid selling purely because the route has been announced. “Unless a property is directly affected by construction or the infrastructure disruption, waiting for connectivity to be improved is likely to be to your advantage.
“In short, the Gautrain expansion should be viewed as a long-term investment in location, not a short-term speculative opportunity. New infrastructure does not increase the value of every nearby property equally. It increases the value of those in locations that offer better access, stronger surrounding development and a more attractive overall environment.”
