How property demand and values are impacted by commute times

Private Property South Africa
Private Property Reporter

As our roads seem to get busier every year, people are seeking ways of reducing their commute times to improve their 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 on the KwaZulu-Natal (KZN) North Coast.

“Using data supplied by Tracker, an automotive analysis company, Lightstone has provided average travel times to Johannesburg and Cape Town from their outlying suburbs. Peak travel times from Midstream, Centurion and Pretoria are 40, 60 and 80 minutes respectively while travel times from Milnerton, Belville and Durbanville are 40, 45 and 60 minutes. Locally, travel times from Ballito, Berea and Hillcrest to uMhlanga are 45, 35 and 60 minutes respectively. The total time spent commuting thus averages 1.5 to 2 hours per day in in the major cities but can be substantially longer in the event of traffic incidents.

Read more: To commute or not to commute?

“It therefore is no surprise that property values are affected by proximity to key business nodes and transport routes. In the 2014 US census, Americans ranked commute time second only to crime, whilst 16% ranked commute time as the most important criterion in choosing a property.

“New Yorkers were prepared to pay $60 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 closer to home, and in support of international trends, an example of commute times affecting property values could be seen in the surge of values after the construction of the Gautrain. According to Lightstone, the average value of properties in the suburb of Sandton rose by more than 96% between 2010 and 2016 versus similar apartments in neighbouring Rivonia – only a short bus ride away from the station – where the average price rose just 59%.

Says Bailey: “People buying along our North Coast are no different and 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 relocating their families from Gauteng to secure estates on KZN’S North Coast where they can enjoy the sub-tropical climate, warm ocean and coastal forest,; world-class promenade, and abundance of top schools, new shopping centres and restaurants. Some of the most popular estates spanning uMhlanga to Ballito include Izinga, Hawaan Forest, Signature Sibaya, Gold Coast Sibaya, Zimbali, Simbithi and a growing number of new estates launching further northward.”

Bailey says another trend is that the breadwinner often travels to Gauteng during the week and returns on a Thursday or Friday. These homeowners achieve their primary goal of living in a quality environment and, given the 10 minute trip to the airport and 1 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 along the Atlantic Seaboard in Cape Town, there has been a significant shift toward the North Coast of KwaZulu-Natal. Two of the main factors affecting Cape Town include the city’s traffic congestion and, most recently, its water shortage. It seems that KZN’s road infrastructure is pre-empting demand with the completion of three massive new interchanges at Umgeni, uMhlanga and Ballito within just a few years of each other. In addition, it seems that the relocation of the international airport to the North Coast has ultimately been a significant enabler of the semigrant trend in our area.

“While many people still think that it is 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 will see this trend increasing as congestion in cities increases and people seek to prioritise quality of life over the hum-drum of big city living.”

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