The new southwest portion of the ring road is expected to be a boon for residential real estate near the proposed roadway.
“Transportation accessibility is key to location — which is everything in real estate. And the Ring Road is all about transportation accessibility: access to downtown, other parts of Calgary, the mountains,” said Scott Bollinger, broker for the ComFree Commensense Network.
“Recent studies in Edmonton and California show us we should expect housing and property values around the ring road to increase. The interesting thing about the Calgary example is that much of the adjacent property is already developed and has been constrained by limited infrastructure and access for many years. That means that, unlike other major freeway projects, most of the gains in property value in Calgary’s example may be felt by individual homeowners as opposed to developers.”
He said the studies show that prices may increase but not until well into the project’s construction or even completion.
“My gut tells me that southwest Calgary might be different,” said Bollinger. “This project has been in the planning stage for decades and will now impact established communities. The increases in value may be priced into the market sooner than we’ve seen in other examples.
“Why do property values increase? A lot of it comes down to commute times and accessibility to recreation areas, shopping options and job centres. We’re measuring these times not in miles or kilometres now, but in minutes. And when you can cut the minutes it takes to drive to a favourite restaurant, or a hockey arena in the northwest, or Sunshine Village on the weekend, that time saved is reflected in the price you’re willing to pay for a property.”
But it’s not just existing residential communities that will benefit, said Bollinger, adding that a significant amount of land on the extreme southwest edge of Calgary sits undeveloped, under-utilized and likely undervalued.
“This deal has the potential to double or triple land prices in that area and we are already beginning to see a rise in activity as developers and speculators gain confidence that the area will eventually be accessible by the Ring Road,” he said.
The Calgary Transportation Effect report, released this year by the Real Estate Investment Network, said overall transportation improvements in the city will deliver a 10-20 per cent enhancement of real estate values in the regions most affected. In the future, these areas will outperform the rest. If the market goes up everywhere, these areas will increase by about 10-20 per cent more. If the values drop, these will drop by 10-20 per cent less, said the report.
Don Campbell, senior analyst with the Real Estate Investment Network, said transportation arteries become increasingly critical in a city growing as quickly as Calgary.
“When the arteries become clogged, the flow of goods and people not only slow down but so does the economic growth. In today’s economy, distance is measured in minutes, not kilometres,” he said.
“The completion of the first three-quarters of the Calgary Ring Road is already having a positive effect on the repositioning of office, retail and commercial space. No longer is it simply a consolidation into the downtown core. The City of Calgary, its citizens and its businesses now have more and quite frankly more strategic options for location. We are already witnessing this especially in the north and southeast quadrants where full live/work communities are forming thus taking pressure off older transportation arteries.”
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