Access to transit is more valuable, home buyers are willing to pay extra.
Home buyers willing to pay extra for SkyTrain proximity
Kenneth Chan
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New data shows home buyers in Metro Vancouver are still willing to pay for the premium of being within close walking distance from a SkyTrain station.
While there is currently an aversion to public transit, the health crisis has only had a minimal effect on buyers’ willingness to pay for the above-assessed value for an apartment, according to real estate marketing and analytics firm Roomvu.
For every kilometre away from the closest station, buyers are likely to pay 0.61% less over assessed value in the initial COVID period (March 15 to May 30) — down slightly from 0.63% in the pre-COVID period (January 1 to March 14).
“There was a strong relationship between the distance from the closest transit location and the percentage differences between sales price and assessed value,” reads the report.
“The result clearly indicates that apartment units close to the stations are still being sold at a premium over their assessed values in the post-COVID lockdown period.”
The distance penalty per km from the closest station is highest for Burnaby North (+3.7%), followed by Burnaby South (+2.1%), Vancouver East (+1.9%), New Westminster (+1.3%), Vancouver West (+0.7%), North Surrey (+0.1%), and Richmond (-0.3%).
“It looks like access to transit got more valuable over the course of time,” said Thomas Davidoff, economics and professor at UBC’s Sauder School of Business, in a statement.
“Prices of transit-friendly homes rose over the course of the year in spite of the far-reaching negative economic consequences of the pandemic.”
On average across the region, most apartments sold are priced above their assessed value, with the final sales prices for these homes at 4.4% above the assessed value, with buyers willing to 4.6% above assessed values during COVID compared to 4.3% before the pandemic.
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