Market Connections: Toronto Transit Lines and Real Estate
$60,000. That’s how much, on average, a single underground parking spot typically adds to the value of a downtown Toronto condo. Cars are expensive, fickle creatures with their purchase price, the cost of gas going ever upward, and the growing concern about limiting our carbon emissions on everyone’s mind. Not to mention, our roads are crammed with traffic even at the most mundane of hours.
It’s no wonder that everyone from entrenched business moguls to cash-strapped millennials are opting to take transit. Two hours’ worth of travel, even on a platform as finicky as the TTC, is a pretty reasonable price to pay to get around town. As long as you manage to avoid the crowds, transit can also be a moment of relative calm in a stressful day. No careful attention to which lane you have to be on to get to which highway, no traffic jams, no getting cut off by a taxi for the fifth time this morning… just you and your podcast or music of choice.
Image courtesy flickr.com/photos/RigersRukaj
All of this being said, it’s obvious that transit in the city is a huge issue. It’s a subject of considerable political contention as well, with different parties bickering over the planned subway extensions both before and even after shovels have gotten in the ground. The lines our subways and streetcars paint across the map has a huge impact on where and how new Torontonian infrastructure is built. They also have a huge impact on the price of that property.
Parking and gas charges have given way to the hidden tax of proximity to subways, with real estate prices jumping to meet the high demand of condos and townhouses near subway lines. It’s not surprising that developers are quickly snatching up any property they can close to subway stations both downtown and up farther Northward and Eastward. While the convenience does bump up the price, it has nothing on the costs and various stresses of commuting via car, so it’s a worthy subject to consider when planning your investment or own home purchase.
In a study done by real estate company Avison Yong from 2012 to 2015, it was found that properties within 500 metres of a subway station were worth a full 30% more than those beyond that range. This difference in value even showed up in the occupancy rates, with those in range of transit netting a 3.6% lower vacancy rate.
In a study done by Zoocasa (above), the 2018 sales prices of both houses and condos within proximity to subway stations was mapped out. Units along midtown Line 1 seem to net the biggest buck, with locations along the far East end, and the newer Scarborough LRT are a bit more affordable.
With all of this said, it’s a sure investment to snap up properties in close proximity to our current subway system, and maybe even worth the gamble to purchase in the area of proposed subway extensions. However, that’s a contentious subject at the moment, due to local and provincial authorities butting heads over where the downtown relief line will go.
One project that seems set in stone however, is the LRT Eglinton crosstown line. Set to complete by 2021, the area around Eglinton is bursting with new developments, eager to meet upcoming demand for an area that may well become a second downtown in the coming years. Analysts expect a population influx upwards of 20,000 new residents over the next few years.
As an aside, if you’re thinking that most of this growth is a little too condo focused, I wouldn’t worry much about it. Millennials – the current generation of first-time homebuyers - are a little more focused on the convenience of condo life. On top of the location location location factor, they also get to save time not doing yard work, repairs, or other mundane tasks. In a world of modern shortcuts and technology, time is the most valuable currency there is.
Whether you’re moving in from out of town, relocating to be closer to the action, or looking for investment opportunities, understanding local transit is a key factor in making your finances and time worthwhile. Do your research, and if you want to ask the experts, feel free to drop us a message. Smart decisions make for brighter futures, and we want the best we can get for everyone.