Gautrain ’ s Impact on Real Estate
Infrastructure Sets the Trend for Growth
A ll 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 reveal 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
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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 .
SA Real Estate Investor Magazine DECEMBER 2017 / JANUARY 2018 13