Access to a subway stop is often a selling point for condos in Toronto, while closeness to GO train stations and highways are perks for homebuyers looking to suburban communities across the GTA.
But what if there was a high-speed rail line connecting Toronto to Windsor, with stops at Guelph, Kitchener, London, and Chatham in between?
The Ontario government today announced it was moving forward with plans for just such a line — one that would carry trains travelling up to 250 kilometres per hour — and Robert Kavcic, a senior economist at BMO, suggests it could improve affordability in the Toronto area’s housing market.
“If there was quicker and better transit to areas beyond the very supply constrained area within the Green Belt, then it would take some pressure off for sure,” says Kavcic.
High-speed rail could allow prospective GTA homebuyers to cast a wider net in their search. They could look beyond the Green Belt to more affordable markets that today would be virtually impossible to make daily commutes to Toronto from for work.
For instance, Ontario Transportation Minister Steven Del Duca, estimates a trip from London to Union Station could take 73 minutes on high-speed rail, compared to the current three-hour commute, the Toronto Star reports.
However, Kavcic notes that Southern Ontario home shoppers won’t be benefitting from this infrastructure any time soon.
“That’s a story that’s like 10-15 years in the making, if not more. So for the foreseeable future, no, it’s probably not going to do much,” he adds, agreeing it’s a long-term solution.
In fact, the proposed two-phase project has an estimated completion date in 2031, according to the High Speed Rail in Ontario: Special Advisor’s Final Report, which the government referred to. So far, Ontario has committed $15 million to fund “a comprehensive environmental assessment,” and is beginning preliminary design work for the project, which carries an overall projected price tag of $21 billion.
Even once complete, the impact of high-speed line on home prices could double edged, however. Kavcic says it could help heat spread. “It would allow more demand to spill further out for sure,” says Kavcic.
It hasn’t taken a bullet train for cities that are hundreds of kilometres away from Toronto to record double-digit annual price growth this year, a note from Kavcic’s colleague, BMO Chief Economist Douglas Porter, suggests.
“Much smaller cities, where commuting to Toronto is not really practical, are also seeing rapid price increases,” writes Porter in a report published today.
In Ingersoll, roughly 130 kilometres from Toronto, home prices are up 44 per cent from a year ago. The story is much the same in Peterborough, Cambridge, Woodstock and Ingersoll, all of which posted year-over-year increases in excess of 30 per cent.
“Now, these are all charming places, but no one is going to mistake Ingersoll for Paris — well, maybe Paris, Ontario — and it simply speaks to how the speculative frenzy has gripped much of Canada’s most populous province,” Porter adds.