Profit from a proximity to public transport

For those on the lookout for savvy property investment opportunities, an important new report from global property company Knight Frank gives a clear indication of the growing desirability – and swiftly rising value – of homes close to public transport hubs.

The report examines the impact that the Crossrail infrastructure project in London has already had, and is expected to have, on surrounding residential markets. And it shows that the average value of residential property within a 10 minute walk of the new Crossrail stations has risen by more than 30% since 2008 – even though the project is only schedule to go into full operation by 2018.

This, says Knight Frank, puts property value growth in the Crossrail “walk zones” at least 8% ahead of the average growth in other parts of London. What is more, a further 40% average value growth is predicted for walk zone properties by 2018.

Housing in Farringdon and Tottenham Court Road, the report predicts, will see the largest uplift – “values here are expected to rise by an additional 1,5% per year over and above the growth expected in prime central London prices, to give a total increase of 43% in the next five years”.

And in South Africa, a similar pattern is emerging now, thanks to consumers’ increasing disenchantment with traffic congestion, commuting times, and the steeply rising cost of fuel and private transport.

For example, proximity to a Gautrain station has already boosted property values – and property development – in certain parts of Johannesburg, Pretoria, Centurion, Midrand, and Kempton Park.

Gautrain

Lightstone figures show that in Rosebank, Johannesburg, the average price of apartments and other sectional title properties has risen from R771 000 in 2010 (prior to the Gautrain station in the area being opened) to R1,1 million currently – a 42% increase that obviously far exceeds the average property growth achieved in the city during that period.

In Hatfield, Pretoria, new developments have mushroomed to meet huge demand since the Gautrain terminus opened there in 2010, and some 455 units have been sold in the past three years. Similarly, in Halfway Gardens near the Gautrain station in Midrand, there have been 470 sectional title units sold in the past three years, and in central Kempton Park, there have been 460 sectional title units sold.

In the Western Cape, the new MyCiti rapid bus transport network is having a similar effect on property values as it expands. Certain areas on the Western Seaboard, for example, are now just a 20- to 30-minute bus ride from Cape Town CBD, and in Table View close to the main bus station, the average price of sectional title properties has risen 16% in the past three years, and the average price of freehold homes by almost 14%.

Even better, property all along the Western Seaboard is still much more affordable than on the Atlantic Seaboard or in the Southern Suburbs, and thus much more accessible to the average investor – as is property in central Johannesburg, close to the Park Station Gautrain terminus, where there have been relatively few sectional title sales in the past three years, but the average price has risen by a whopping 69%.

In other words, there are still great opportunities for anyone with an eye on the development of the public transport network to invest in properties with outstanding growth potential.

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