One of the crucial 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 primary reason why our transit system is no longer capable to satisfy the demands. The number of minor improvements in past years offered only provisional solutions. A project called The Big Move, starting in the next few years, has been planned to completely improve the transportation in south Ontario.

The crucial part of this overall transit plan is called MoveOntario2020. It has been published in June 2007 (is that a random luck that liberals were reelected just in October after that?) and people are now impatiently anticipating the new reality. There are 52 projects, phased till 2020, with the budget around $17.5 billion ($11.5 billion covered by Ontario). 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 real estate in Toronto is quite complex science. It’s a very sensitive industry, where a huge number of factors have a smaller or bigger impact. It is not always possible to tell how a specific change impacts the local or global economic environment, but we can identify some crucial factors. The transit system is one of the crucial factors.

You probably have an idea about the importance of the transit system for the sufficient quality of living. For instance, the direct expenses on commuting are lower, just as indirect expenses such as time consumption. Moreover, we can mention better accessibility of public facilities or cleaner air and generally healthier environment, while there only a few minor negative short-term aspects.

There are a number of research papers attempting to quantify the effect of various improvements in transit system. 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 home value can be. Every home’s value can increase by 2.5% on average, provided that the public transport frequency is improved twice. This is valid just one year after the works are finished.

MoveOntario impact on the real estate in Toronto in upcoming years

Our expected outcomes can be based on a recent study conducted by REIN Canada. Rail commuting system is one of the crucial ways to decrease the time people need for commuting. In Toronto, we have the underground and GO Train system.

The positively influenced areas lie in about 800m range from each station, with value maximization in 500m range. More areas influenced are older neighbourhoods, similarly areas inhabited by citizens with lower average income are again more. Areas around Spadina and Younge subway lines extensions in Toronto can be introduced as examples of the effect on house prices. 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 effect will be evoked by new light train transit lines, involving Waterfront and Eglinton neighbourhoods.

Conclusion

In this short article, we cannot analyze in detail the whole mechanism how MoveOntario 2020 will influence the Toronto housing market. According to REIN, the most positive effect will be on areas around Vaughan, Scarborough and Barrie. The second group of highly affected areas comprises of Milton, Brambton and Uxbridge&Stoufville regions. The house prices are expected to rise by 10-20% in these areas. 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. 1-3 years after finishing the specific project, we can expect the positive effect on home prices.

And that was still not the end. Also the quality of life around the old parts should be improved by the new transit system, as more areas should enjoy easier access for citizens. Some 175 000 jobs are supposed to be created thanks to MoveOntario, which may again positively influence the GTA property prices. With well-working transit system we are going to attract more inhabitants, more investors and more business. The whole Toronto is going to profit and property values on the whole Toronto housing market may be positively influenced for the next decades.

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