MoveOntario 2020: Impact on Toronto Real Estate

July 20, 2009

Toronto tram by Jim Crossley

Big move for GTA

Living in a big busy city brings to our life new perspective. Distance is not measured in kilometers anymore, but in minutes. Transportation system is the backbone of every big city in the world and Toronto is no exception. Population explosion in the last four decades (Toronto had around 600 000 citizens back in 1970, now it’s over 3 500 000) has been the main reason why our transit system is no longer capable to meet the demands. Number of minor improvements in past years offered only improvised solutions.

However, now we are going to witness venturesome wave of projects, which are supposed to influence lives of almost all inhabitants of Greater Toronto and Hamilton Area. The whole regional transportation plan, under umbrella of Metrolinx, was named The Big Move and it will completely change the face of transportation in south Ontario in upcoming years.

The most important branch of this overall transportation outlook is MoveOntario2020 plan. Announced in June 2007, it is now broadly expected by public (and we can just guess how much this contributed to liberals’ reelection in October). This plan consists of 52 projects, which should run till 2020, and with estimated costs no less than $17.5 billion ($11.5 billion covered by Ontario’s budget).

Services provided by GO Transit, the Toronto Transit Commission, York Region Transit’s Viva bus rapid transit system, Durham Region Transit, Mississauga Transit, Brampton Transit, and the Hamilton Street Railway are all involved. There are four major goals with impact on the GTA and Hamilton area:

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 Pearson International Airport.
   

   
   MoveOntario 2020

Real estate and transit system

Not only the price system of real estate, but the whole mechanism of real estate market is pretty complicated science. It’s very sensitive industry, where a huge number of factors has smaller or bigger impact. We can’t always separate the effect of particular change in the local or global economic environment, but some of them are more important than others. One of the crucial factors is the transit system.

You all can imagine the way in which transit system positively influences the quality of living. Lower direct expenses on commuting, lower indirect expenses (represented by time consumption), better accessibility of public facilities, higher safety of both motorists and pedestrians, healthier environment with cleaner air, reduced dustiness and noise. Invoked negative impacts on the life quality are in the most cases just temporary (during the period of construction), although in some specific areas negative effects coming from higher noise can remain.

There is number of research papers trying to quantify the impact of various improvements in transit system. In three years old research paper from Tinbergen Institute (dealing with railways only) the positive effect of railway accessibility on property value reaches around 25%; just a simple doubling of public transport frequency increase means average 2.5% price increase for every property in the area – just one year after the works are finished.

Naturally, every city and every transit system improvement is of a specific nature. Let’s try to discover what MoveOntario2020 means for Toronto real estate.

MoveOntario impact on the real estate in Toronto in upcoming years

GTA is rapidly growing and attracts more and more citizens, resulting in rising numbers of cars and commuters. Major improvement has been necessary and MoveOntario 2020 is supposed to have big effect on quality of living and on the real estate market in GTA. We can base the expectations on recent study made by REIN Canada.

One of the key means of transport to lower the commuting time is rail commuting system, in Toronto represented by subway and GO Train system.

The positively affected areas lie in about 800m range from every station, with value maximization in 500m range. More price affected are older neighbourhoods, similarly areas inhabited by citizens with lower average income are again more. Speaking about real estate prices effect, we can mention Toronto neighbourhoods around Spadina and Younge subway lines extensions. For GO Train it’s more complicated; there are 17 projects involving capacity expansion, new lines and/or lines extension and there are 9 additional projects involving GO Bus Rapid. Similar impact will be caused by new light train transit lines, involving Waterfront and Eglinton neighbourhoods.

Conclusion

It’s definitely impossible to pick all effects of MoveOntario 2020 on Toronto real estate in one article. According to REIN, the most positive impact will be on areas around Vaughan, Scarborough and Barrie. The second group of highly influenced areas consists of Milton, Brambton and Uxbridge&Stoufville regions. These regions can expect 10-20% price enhancement. The third group is represented by all Toronto neighbourhoods which lie along the new lines or along the old lines, which capacity will be increased. Positive impact on real estate prices should appear 1-3 years after the particular project is finished.

And that’s not all. New transport system will improve life quality also near the old parts, because now more areas will be easily accessible. MoveOntario is supposed to create around 175 000 jobs – again, this can have positive impact on real estate prices in the GTA. With well-working transport system we are going to attract more citizens, more investors and more business. The whole Toronto is going to profit and property values on the whole Toronto real estate market may be positively influenced for the next decades.

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