New data from property data group, Lightstone, shows how proximity to Gauteng’s Gautrain rail system has impacted real estate and property prices since its launch in 2010.
According to Lightstone, 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 announced earlier this year, Lightstone said its data 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,” the group said.
However, 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, it said.
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. The data also showed similarities between Centurion and Sandton, which Lightstone said 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, Lightstone said.
Future Gautrain developments
The Gauteng Provincial Government has estimated that congestion will have such an increasingly negative effect on business districts that by 2037, vehicles travelling on Gauteng roads will be doing so at an incredibly slow 15km/h.
To combat this, the Gautrain Management Agency is planning to extend the rail route by some 150 kilometres over the next 20 years, including routes through Randburg, Fourways, and Soweto – though the expansion is expected to 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, it may be viable to expect the same from more affordable areas like Cosmo City and Mamelodi, Lighstone said.
Mamelodi currently has the highest average property inflation of the areas earmarked for Gautrain expansion, and the data group said 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,” the group said.