Saturday, April 20

Traffic impacts property demand and prices

Google+ Pinterest LinkedIn Tumblr +

Congestion and the drought are hitting Cape Town's real estate market

As our roads become increasingly busy, people are seeking ways to reduce their commutes to improve quality of life.

Traditionally, the solution has been to live closer to the workplace, but sometimes this means sacrificing quality of location, says Gareth Bailey, Pam Golding Properties area principal for Durban Coastal in KwaZulu-Natal.

“Using data supplied by Tracker, a vehicle analysis company, Lightstone has provided average travel times to Joburg and Cape Town from their outlying suburbs,” says Bailey.

In Joburg peak travel times from Pretoria are 80 minutes, Centurion 60 minutes and Midstream 40 minutes. In Cape Town, travelling from Durbanville will take 60 minutes, from Bellville 45 minutes and Milnerton 40 minutes. In Durban, travel times from Ballito to Umhlanga are 45 minutes, from Berea 35 minutes and Hillcrest 60 minutes.

“This means the total time spent commuting averages 1.5 to two hours a day in the major cities, but can be substantially longer if there are traffic incidents.”

Bailey says it is no surprise that property values are affected by proximity to key business nodes and transport routes. In the 2014 US census, when asked to describe the most important criterion in choosing a property, most Americans ranked commute time second only to crime, while 16% ranked commute time as the most important criterion.

“New Yorkers were prepared to pay $60 (about R714) a month more in rent to shave one minute off their travel time. Likewise, a 2016 Swedish study published in the Journal of Transport Geography found that proximity to CBD affects property values in all price segments, except for the top end of the market.”

Bailey says the effect of commute times on property values was seen in the surge of values after the construction of the Gautrain.

According to Lightstone, the average value of properties in Sandton rose by more than 96% between 2010 and 2016 compared with similar properties in neighbouring Rivonia – only a short bus ride away from the station – where the average price rose just 59%.

Bailey says: “People buying along the KZN North Coast are also seeking to reduce time spent commuting. However, like the top end segment in the Swedish study, they are not prepared to do so at the expense of quality of location.

“I think more people in this segment of our market treat their primary residence as a sanctuary rather than a utilitarian home.

“With semigration an ongoing trend, we see an increasing number of people moving their families from Gauteng to secure estates on KZN’s North Coast.

Bailey says another trend is that the breadwinner often travels to Gauteng during the week and returns on a Thursday or Friday. These homeowners live in a quality environment and, given the 10-minute trip to the airport and one-hour flight to Gauteng, they don’t have to sacrifice much more than the average commute times experienced in the major cities.

“While this semigration trend was initially most prevalent in Cape Town, there has been a significant shift to KZN’s North Coast.”

Bailey says two of the main factors affecting Cape Town include traffic congestion and the drought.

“It seems KZN’s road infrastructure is pre-empting demand with the completion of three huge new interchanges at Umgeni, Umhlanga and Ballito in just a few years of each other. And it seems the relocation of the international airport to the North Coast has been a significant enabler of the semigrant trend in our area.

“While many people still think it’s necessary to sacrifice preferred location to live closer to work and reduce commute times, a new breed of hedonistic semigrants are choosing to live in their ideal location and travel to their workplace during the week. I think we’ll see this trend increasing.”

Like us on Facebook



About Author