All over the world successful train systems have made a positive impact on a country’s economic growth. The introduction of the Gautrain in 2010 has been a step towards creating a world class metropolis and now with Phase 2 being introduced earlier this year, Lightstone reveals how congestion management can have a positive impact on property values.
High congestion levels can subdue property price growth, and with the rapid urbanisation of business districts in South Africa it is an obstacle that needs to urgently be addressed. In the last five years, an already densely populated Rosebank has seen a positive inflation, some of which could be attributed to the Gautrain station.
Property prices close to the station in Rosebank achieved an additional 2.5%-point growth than the surrounding areas further away, after the Gautrain station was opened. Lightstone data has also shown very interesting similarities between Centurion and Sandton, which could indicate that Centurion has the potential to develop into a bustling business sector like Sandton.
When comparing commercial property growth, Marlboro has experienced retail property inflation of almost 10% during the period 2011 to 2013; 4% of which can be ascribed to the existence of the Gautrain and surrounding properties’ proximity.
What does the future hold?
With more than 80 million passenger trips the Gautrain has proved to be a modern and efficient transport system on par with any first world country’s equivalent. The Gauteng Provincial Government has estimated that congestion will have such an increasingly negative effect on business district to the extent that by 2037, vehicles travelling on Gauteng roads will be doing so at an incredibly slow 15km/h. Expansion of the Gautrain will start in Randburg, Cosmo City and Little Falls. If the Gautrain has had a positive effect on the property market in both Rosebank and Sandton, is it viable to expect the same from more affordable areas like Cosmo City and Mamelodi? Mamelodi currently has the highest average property inflation of the areas earmarked for Gautrain expansion and it will be interesting to see if the presence of a Gautrain station will boost this market even more.
The timing of when each of the Gautrain phases roll out, will determine how quickly the markets of these areas will change. For instance, in Lanseria, the train station is only anticipated to open in 15 years’ time which offers the opportunity for longer term investment horizons.