Spadina Subway Extension and Housing Price

[tgzo]

Hi all:

As all of you may be aware that Toronto will be getting a subway extension running from Wilson all the way northward to Vaughn and passing key areas such as Keele and Sheppard, Keele and Finch, York University, etc.

My questions are threefold:

1. How would this new subway extension impact the existing detached/semi detached/townhouse/condo/apartment units located right beside these new subway stations? Has there been any empirical studies showing the %($) of appreciation in home value when a new subway station has been built beside it? If so, what's the expected range of appreciation (10%+, 20%+, 30%+)?

2. Generally speaking, when will this price appreciation be factored into the value of the existing residential units? Immediately after the subway extension news announcement (which was passed already) or at the actual completion of the subway (that means tentatively set at 2015 for now) or a gradual appreciation over the next 5 years.

3. I am curious because I am interested in buying properties for capital appreciation in these neighbourhoods and wonder when is the best time to do that. Is it now? 2012? 2015 (when the actual subway stations are actually built)?

Thanks for your insights.

 

[Bentley]

Well I think if interest rates are low now and you can lock in for 5 years at a great rate, now might be a good time to start accumulating properties. You'll end up selling them just before you refinance which should be extremely close to when the subway stations open.

On the other hand, if interest rates rise significantly in that time, you may not see the appreciation you expected since it will become more expensive to finance a home and in theory, the value will drop proportionately to make up for the increased financing costs.

 

[tgzo]

thanks for your answer to my Q3, but do you know anything about the relationship between subway construction and home price appreciation for the surrounding residential units (e.g. an approximate appreciation %)?

 

[Uncle Teddy]

Since construction has basically started and its 99% that the extension will be built wouldn't the price have already risen to reflect this?

 

[Panda]

I think it is same as stock market. Whenever there is a news of something happening e.g. merger or any economic forecast. its value gets discounted to the present value and is reflected in the current market index.

So the news already would have its impact on the prices but it will be minimal as its still 5 years down the road. But keep in mind as mentioned above that interest rates after 5 years may be high which would have had put downward pressure on the housing prices (but it will be overall- not just around the subway line)

 

[X2 Buyer]

People will take living near subway line as one big benefit so it for sure will drive up the price. Though why only Spadina - b/c other LRTs will be built up too. LRT is same convenient as subway. Potential buyers compare all the opportunities and IMO along the future Eglinton LRT line it has the most potential. Though I am aware not a lot new condo projects around yet.

 

[vz64]

1. How would this new subway extension impact the existing detached/semi detached/townhouse/condo/apartment units located right beside these new subway stations? Has there been any empirical studies showing the %($) of appreciation in home value when a new subway station has been built beside it? If so, what's the expected range of appreciation (10%+, 20%+, 30%+)?

2. ... when will this price appreciation be factored into the value of the existing residential units? ....

3. ... when is the best time to do that. Is it now? 2012? 2015 ... ?

Thanks for your insights.

It can be tricky to figure it out. I remember reading one article (I think it was in TS) discussing this issue. If I am not mistaken, most adjacent to subway properties appreciate faster than more remote properties in the area, but there are exceptions, I think they mentioned a number of stations along the Bloor-Danforth line. If need some numbers and you have a way to access Toronto Real Estate Board data (maybe a friend with access?), look at Downsview station stats--when it was open, 2 yr later, 5 yr later and compare it to the appreciation rate of some more remote areas (e.g., Bathurst-Sheppard, Keele-Finch) in the same years.

 

[tgzo]

any more ideas?

 

[kandiman]

property values will increase

According to many studies the property values will go up dramatically in those areas.
See:
http://www.realestateinvestingincanada.com/portals/0/media/GTA%20Transportation%20Report%20.v1.pdf



or search google for:

The Impact of Transportation Improvements on real estate values in the greater toronto area



From reading these studies keele and finch is the intersection that has the most to gain from the subway extension and also it is the only place where you can find property to invest in that is close to these stations. (within 500 meters). Also keele and finch has the kind of population that would value a subway station at walking distance significantly.
The best properties I found are the condominiums and townhouses at Four Winds drive....just off keele and finch.
The value is predicted to go up for the next 10 years by 10 percent more than the rest of the market. People have already started investing but the properties are still very cheap if you look at how much potential there is.

I do not think that you can find any other properties that are along the proposed subway line within walking distance.

Hope this helps.

 

[mmiron_2000]

From my own experience and working close to the future Vaughan Corporate Center Station (Jane and Hwy 7) I believe investing in that location is of the most benefit. There is a new development (made up of 4 condos) called EXPO. Building 1 is almost sold out and building 2 is just about to be released to the public. Visit their sales office - it's very impressive and will give you all the information you need to know regarding this project.

What does everyone think about this project http://www.insidercondos.com/Expo-City-Condos-2?gclid=CJDl96HkoKwCFYbrKgodFl244Q

Assuming that one buys a condo for the purposes of investment - do you think the project's proximity to York University and completion of the subway line (estimated to be by 2015) is a good investment?

Any thoughts are greatly appreciated!

 

[andrewpmk]

I wouldn't count on any price gains because the areas along the subway extension are currently poor neighbourhoods, e.g. the new townhouses south of York U are mostly student rentals, are near the notorious Jane/Finch area and there is a lot of crime. Lawrence Heights further south has stubbornly resisted gentrification for years now despite the subway. Also there can be serious problems with airport noise from Pearson Airport and Downsview Airport in this area. Finally Vaughan Centre is mostly industrial right now, it will never be a desirable area like North York Centre because of the proximity of the rail yards.

 

[W. K. Lis]

I wouldn't count on any price gains because the areas along the subway extension are currently poor neighbourhoods, e.g. the new townhouses south of York U are mostly student rentals, are near the notorious Jane/Finch area and there is a lot of crime. Lawrence Heights further south has stubbornly resisted gentrification for years now despite the subway. Also there can be serious problems with airport noise from Pearson Airport and Downsview Airport in this area. Finally Vaughan Centre is mostly industrial right now, it will never be a desirable area like North York Centre because of the proximity of the rail yards.

The Subway extension will cause gentrification with the result that wealthier people ("gentry") will acquire or rent property in low income and working class neigbourhoods and upgrade them. Except for public housing, of course. though I expect more vigilance by the new neighbours will do some pushing as well.

 

[andrewpmk]

The Subway extension will cause gentrification with the result that wealthier people ("gentry") will acquire or rent property in low income and working class neigbourhoods and upgrade them. Except for public housing, of course. though I expect more vigilance by the new neighbours will do some pushing as well.

A subway extension does not guarantee gentrification. As I already said, Lawrence Heights is still a poor neighbourhood even though the subway has been there for over 30 years. The same is true with Lansdowne & Bloor, the Bloor-Danforth line east of Coxwell, and the St James Town area. I would not count on gentrification at Keele & Finch, similarly I would not count on gentrification at Keele & Eglinton (another notorious neighbourhood) which is also getting a subway station soon. Plus as I said before, some areas around York University do have high levels of aircraft noise from Pearson, the flight paths from Pearson go near the Finch & Keele intersection, and Pearson airport is not going away anytime soon.

 

[superfrog]

Keele and Finch is where I want to be

The new houses at york university that went up in in the last 10 years went up in value dramatically after being build (i know people who made more than 300K in 5 years). This is because of the money they can make from renting out these places. These properties are making money right now without the subway, no speculation. Keele & Finch does not have any social housing. Most/All properties at the 500 meter radius are owned by people who live there or investors. No appartments within 500 meters.
Say whatever you want about the neighbourhood but the close proximity to the university and the location makes it a place where people want to live. Also the future of Keele and Finch looks great. Check out the future plans for York University:
http://yudc.ca/successstories/
http://www.toronto.ca/planning/york_u_plan.htm

Also Pan Am games are coming to York University and a new 12500 seat stadium is going to be build
http://www.torontosun.com/2011/11/06/building-pan-am-dreams-in-to

Also at Keele and Wilson a brand new Hospital is giong to be build: (state of the art)
http://www.hrrh.ca/redevelopment


Also Downsview Park is gettting a makeover and tons of new development is going on there (just south of Keele and Finch):
http://www.downsviewpark.ca/eng/park_dev.shtml


Andrew,
1. Most of the neighbourhoods you are comparing do have social housing in close proximity and also the areas you are talking about do not have much property that you can buy within walking distance (500meters) from the subway stations. They are either apparment buildings or further away. Even in the nighbourhoods that you are mentioning there was a price gain after the subway was build due to the subway if the right criteria was met (500 meter walking distance and property can be invested in). There may be only few exceptions.
2. There is absolutely no noise from the Pearson (which is located in Mississauga) or the other small airport at Keele and Finch. If there was this noise would also be in North York Centre. I recommend looking at the map of Toronto. Have you ever lived around this neighbourhood to claim this?
3. Keele & Eglinton is getting an LRT in 10 years (LRT and subway extension are very different). Also it does not have Canada's 3rd largest university right to the north of it.
Keele and Finch is getting an Extension to one of only two subway lines (ignoring sheppard subway) in toronto. This means you get on the subway and get out in Downtown Toronto. No LRT, bus or transfer.
4. The properties at Keele and Finch are already owned by wealthy home owners (but there will be even more wealthier people buying these properties in the future). Have you seen the house prices of the new building at york university or south of keele and finch. (I am talking about 500 to 1km radius). They are already high.
5. The neighbourhoods that you are comparing to have nothing to do with Keele and Finch. Every intersection has its unique features. You are painting with a wide brush and are not looking at the details. Why are you not comparing Keele and Finch to one or two intersection to the north or east like Keele and Bathurst or Dufferin and Steels? Why are you comparing only to the bad neighbourhoods in the surrounding areas and ignoring the good??

 

[anddan]

Sounds like a lot of exciting developments are lining up on Downsview Park. A friend is considering investing in a pre-construction townhome in Stanley Greene. And yet, she is concerned about having the railway right west of it? How is the noise level? Also, right east of railway, there is a large area occupied by Bombardier / DND / TTC. How would this affect the potential of the property?

Appreciate any knowledge and insight about the area. Thanks.