Imagine walking out of your apartment, grabbing a coffee from Seattle whilst you wait for your train to arrive, then reading the paper or your emails as you speed along the tracks to your office. We have properly all watched too many movies set in New York, but this is the lifestyle that many people are after and it is exactly the lifestyle the Gautrain project hopes to deliver.
People are trading down their large properties for apartment-style living close to transport routes that will allow them to cut back on the commute.
High-density city living is the future of the greater Johannesburg area, whether we like it or not. For many areas the days of a rambling suburb are over as properties are being re-zoned for high density developments. Even high-income earners are opting for apartment-style living close to where they work.
Major cities like Cape Town and Johannesburg have experienced a surge in traffic which can see main roads grid-locked and commuters taking an hour to get to work for a journey that used to take 20 minutes. And the traffic is only going to get worse which means property prices close to transport nodes or major office areas will over time increase in value.
Which is why Jonny Novick, MD of Vered Estates believes that anyone who owns property that is situated close to a station on the Gautrain network should see a continued appreciation in the value of their house. ‘Homes located close to the Gautrain have already increased in value as a result of their proximity to future stations, but there is definitely further value to be had. We are also likely to see a ripple effect, with surrounding areas to the stations benefiting from an increase in value.”
Novick bases his predictions on global experiences which shows that property located near railway stations appreciates sharply in value. Properties situated near the Underground in London, Metro in Paris and Subway in New York all command a price premium, often up to 20%.
An Australian study by PRDnationwide also found that the price of property located near train networks in the country outstripped other areas by 2,6% in 2009.
The demand for affordable apartments on an efficient and safe transport route will also support the rejuvenation of the Johannesburg CBD. Novick says savvy investors are already buying up commercial property in the CBD and converting it into attractive, safe rental units. People working in Sandton will be able to rent at an affordable rate in Johannesburg and yet be no more than 15 minutes commute from work, while people living in Midrand or Pretoria will be less than half-an hour away from work in the Johannesburg CBD.
The question though is whether there is still an opportunity to make money on property in these areas. Novick believes that while the Northern suburbs of Johannesburg such as Rosebank and Sandton are already priced at a premium in Johannesburg, they expect areas such as Midrand to see upward price shifts as the lines become operational and commuters start to benefit from the impact on the quality of life of cutting down on their daily commute.
The cost analysis
This all of course depends on whether the Gautrain project is a success. Gauteng commuters will want to first see how safe and efficient the train will be, however if it delivers a safe and affordable alternative to sitting in hour long traffic jams, the Gautrain should be a major success, especially once the road tolls are introduced.
Currently just the cost of petrol for a round-trip between Pretoria and Johannesburg will set you back R68, once you add the estimated SANRAL toll road fee of R45, the Gautrain starts to look very cost effective at R60 a return trip.
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