Property values could shoot up for buildings within walking distance of incoming light rail in Metro Vancouver, a report from the Real Estate Investment Network suggests.
The Langley-based agency looked at cities across Canada, the U.S. and Australia and found that both residential and commercial buildings near LRT had lower vacancy rates, higher prices and sold faster than those further away from rapid transit.
In Surrey, this could affect properties near the planned $1.65 billion light rail line connecting Newton, Surrey City Centre, and Guildford, as well as homes near a proposed light rail line along Fraser Highway connecting Surrey to Langley.
In Vancouver, property values could shoot up near the proposed $2.8 billion Millennium Line Broadway SkyTrain Extension.
According to the report, the values of real estate near mass transit – including light rail, SkyTrain and highways – have premiums from one per cent up to nearly 40 per cent.
Although researchers focused on rail transit, studies show that real estate values increase near newly-built highways as well.
The report found that the big difference between the impacts of rail transit and highways on property values was that highway-adjacent properties did not take longer to sell.
“The increase in value of residential properties located in close proximity to a highway was partially offset by a reduction in price as noise levels increased,” the report reads.
“However, counter-intuitively, houses impacted by highway noise did not take any longer to sell than those farther removed.
The biggest price boost was seen with multi-family homes, which saw a jump of 99 per cent in increase value if they were 400 metres from mass transit.
Back at 1,600 metres from mass transit,multi-family homes saw just a 27 per cent hike in value – the same hike as all types of properties saw on average.
Residential properties saw an 11 per cent jump when they were 800 metres from mass transit; however, it was possible to be too close – homes within 274 metres of mass transit only saw a decrease of up to 11 per cent.
However, the increase was limited to buildings near “stations, stops, and onramps,” while being close to the route itself dampened real estate values.
But although the buildings get pricey, buyers are still more than eager: the report found that residential units near light rail tend to sell more quickly and at higher prices than similar units not near transit.
Buying at the perfect moment
While there are several major transportation projects in the works in Metro Vancouver, REIN warned that buyers shouldn’t pick up any new properties until they’re sure a project will go ahead.
In Surrey, mayor-elect Doug McCallum has thrown cold water on the idea of light rail in the city, despite a fully-funded proposal for the $1.65 billion project having been signed back in summer 2018.
McCallum told the Black Press Media his team will put forward a formal motion to cancel the light rail project in Surrey at the inaugural meeting of the new council on Nov. 5, after campaigning on a promise to scrap the project in favour of SkyTrain.
REIN said investors and buyers should focus their attention “largely on areas where construction has started,” and not to gamble with ideas just in the works.
– with files from the Surrey Now-Leader