The top 4 things people pay more to live near
Every homebuyer knows the mantra “location, location, location”. But location, of course, is a relative word. Being located next to a prison or a land fill won’t do much for your home’s resale value. But there are a select few things that people will always pay more to live by. Mountains and oceans are two of them, but since those aren’t exactly nearby for most in the country, here are four things that everyone should look out for…
Homebuyers will fork over extra cash to live near efficient public transport. With real-estate prices in urban centres climbing alongside the cost of gas, it’s easy to see why. Then there are hard-to-find parking spots, steep rates for parking lots, and headache-inducing traffic jams.
“The number one thing people will pay for is walkability to a subway station,” says John S. Andrew, director of the Queen’s Real Estate Roundtable at Queen’s University. “In Toronto you can draw concentric circles around subway stations and you can see the further you move, the lower the property values are. It’s not nearly as true with streetcar lines or bus lines, because they’re slow. But if you’re three blocks from Eglinton station, that’s like gold.
“Quality of life comes without spending two hours on the 401,” he adds.
It’s not just in Toronto where homebuyers are willing to ante up for rapid transit.
“The feature that adds the most value to the home is nearness to rapid transit,” says Melanie Reuter, director of research at the Real Estate Investment Network. “That’s been backed up by research throughout North America and in the U.K., in Calgary, Toronto, Hamilton, Vancouver, and Surrey. You can see by research that for homes within walking distance—which used to be 500 to 800 metres but… now is considered to be within a km — people will pay 10 to 15 percent more for a home and 10 to 15 percent more rent.”
In London, a home within 500 metres of a train or tube station is typically valued about $75,500 higher than an identical home just 1,000 metres further away, according to Nationwide, a financial institution in the UK.
Improved access to city centres drives real estate demand too. “As with rapid transit,
accessibility to major highway and highway improvements proved to be a major determinant for increased property values in all studies,” REIN’s recent Gateway Transportation Effect report found. Studies show that, as highway networks are created and existing corridors to the CBD (Central Business District) are improved, the value of real estate in the area increases.”
Homebuyers don’t want to be too close to train or subway stations, however. There are negative effects such as nuisance, property crime, noise, and increased traffic on properties located in
the immediate vicinity of many stations, the REIN report notes.
Shops, services, and restaurants
Imagine being able to stroll to coffee shops, yoga studios, restaurants, bank machines, bars, and doctors’ offices: that walkability is worth a few extra bucks.
“People love to be able to walk to shopping,” Andrew says. “It probably doesn’t extend to major grocery shopping but it does to things like small grocery stores where they can pick up a few things on their way home from work, or even clothes shopping. It’s ‘I love that I don’t have to take my car on a Saturday morning,’ especially in a bigger city. That really contributes to a healthy community, where people are out walking around; it’s a safer community and a more vibrant community.”
Obviously this doesn’t apply to the kid-less, but for young families or those planning on starting one, being situated near things like community centres and sports fields is a huge plus.
“Being able to have close access to kids’ activities is something a lot of people don’t really think about, but when you ask people who have young kids how they spend their time, they’ll talk about taking them to ballet or to hockey, and that all eats up a lot of time,” Andrew says. “Being in a neighbourhood where there’s a hockey arena or music classes, all these things you’re taking your kids, adds tremendous quality of life not when you’re not spending the entire weekend or two nights a week ferrying kids too far.”
Being near a “good” school is appealing to families or future parents, with real-estate ads often including this feature in glowing property write-ups
A study by Lloyds Bank found that in England, being near top-rated schools added a premium of nearly $38,000 to a home’s sale price.
This feature may not be quite as clear cut as the others, however.
“Increasingly, parents are driving their kids to school or kids are in private school, so being in the immediate neighbourhood of a good school probably isn’t as critically important as it once was,” Andrew says. “It becomes in every homeowner’s best interest to continue to perpetuate this myth that there’s this amazing school when that information could be 15 or 20 years out of date.”
And just as being too close to a subway station can have its problems, so too can being too near a secondary school.
“Anecdotally, being near a school is very appealing to people but there’s a caveat: you don’t necessarily want to buy a home along the pathway to high school or directly across from high school,” Reuter says. “That’s where petty crime may happen or litter or graffiti or maybe break-ins into cars. That’s something a homeowner may want to be cognizant of.”