MoveOntario project and real estate prices

One of the key attributes of any large city, therefore Toronto as well, is its transportation system. Population explosion in the last four decades, multiplying almost five times since 1970, has been the main reason why our transportation system is no longer able to satisfy the demands. Only temporary solutions have been provided by a number of minor improvements in the past. Eventually, a project called The Big Move will completely change the face of the transportation of south Ontario in next years.

The key branch of this overall transit plan is called MoveOntario2020. 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). $17.5 billion is the total budget set apart for the 52 projects of the whole plan ($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 whole functioning of housing market in Toronto is quite complex science. It’s a very sensitive industry, where a big number of factors have a smaller or bigger impact. Even though we can’t always identify the effect of a specific change in the local or global economic environment, but some of them are more significant than others. One of the key attributes is the transportation system.

You probably have an idea about the relevance of the transportation system for the sufficient quality of living. To mention just a few, it lowers the direct expenses on commuting, indirect expenses represented by time consumption, better accessibility of public facilities or healthier environment with cleaner air, with very minor negative short-term aspects.

Attempts to quantify the effect of various improvements in transportation system are the focus of many research papers. One of the papers from Tinbergen Institute, dealing with railways, states a number of 25% - that is how much the positive effect of railway accesibility on house value can be. If the public transport frequency improves twice, it causes 2.5% price growth for all houses in the area - just a year after finishing the works.

MoveOntario impact on the real estate in Toronto in upcoming years

We can establish the expectations on recent study conducted 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 subway and GO Train system.

This kind of system has a positive effect on areas about 800m around from each station, with value maximization in 500m range. The areas that are affected the most are older neighbourhoods or areas where people earning less money live. 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 expansion and there are 9 other projects involving GO Bus Rapid. New light train transit lines in the neighbourhoods of Waterfront and Eglinton will have a similar effect.

Conclusion

All the effects of MoveOntario 2020 on Toronto real estate market are just not possible to be described in one article. The REIN study shows that the most positively affected areas will be around Vaughan, Scarborough and Barrie. The second group of highly impacted areas consists of Milton, Brambton and Uxbridge&Stoufville regions. In these regions, we can expect the prices to increase by 10-20%. In the third group we can put all Toronto areas in the vicinity of the new lines, or old lines with plans for increasing their capacity. Positive effect on real estate prices should occur 1-3 years after the particular project is finished.

And we still haven't described everything. The new transit system will enhance life quality also near the old parts, because now more regions will be easily accessible. Another positive effect on the real estate prices in Ontario expected to come from the 175 000 jobs which should be created by MoveOntario. The city with a well functioning transit system is able to attract more citizens, more investors and more business. The whole Toronto will profit from the new transit system and the real estate values in the area may grow for the next decades.