The light rail project in Israel has been preoccupying real estate appraisers and investors for some time, and the question is how the new railway will affect the prices of apartments near the railway route.
The answer can be found in countless examples from cities around the world where the arrival of a train has led to an increase in apartment prices by tens of percent. Various studies that have focused on proximity to train stations indicate an increase in the prices of apartments located at distances ranging from 50 to 500 meters from the train station . The further away from the station we move beyond 500 meters, the more apartment prices will decrease. But studies indicate another phenomenon – when the apartment is located less than 50 meters from the station, prices may actually decrease.
It is probably the noise nuisance and air pollution that are responsible for this, and in fact transportation is the main source of air pollution in city centers. The main damage is caused to residents who are close to public transportation. It should be remembered that these figures may change due to the introduction of more and more non-polluting electric buses onto the country's roads.
The American brokerage firm Redfin tracked the purchase prices of over a million apartments in 14 major cities around the world for about two years. It cross-referenced them using the "Transit Score" index, an index that assigns a score to a specific location in relation to public transportation accessibility based on various parameters such as frequency, type of transportation, distance to the station, and so on. The study found that the higher the score, the higher the value of the apartment, with the percentage increase averaging 0.6% for each point in the Transit Score index.
A new player set to join Israel's public transportation systems in the coming years will surely raise the Transit Score of many apartments in the center of the country. This refers, of course, to the Red Line of the light rail, which is expected to be operational by 2021 and will cross the Dan Bloc from Bat Yam to Petah Tikva.
Public transportation users are mostly from lower socio-economic status, while those with higher income and status often use private vehicles. A study conducted by the Bank of Israel recently published that when there is easy access to the train, its use increases even among those with higher incomes. From this we can conclude that living close to a light rail station will be relevant to more and more people.
In conclusion, living near public transportation stations is often accompanied by engine noise, air pollution, and the hustle and bustle of passengers, which affect their quality of life, but it provides easier accessibility for public transportation users. The question is, how many of us actually get to our workplace by bus or train, and for how many of us is proximity to public transportation stations relevant?
As of today, most Israelis still commute to work every morning in their private vehicles. According to the 2016 CBS Social Survey, only 17.5% of respondents get to work by bus and only 3.5% get to work by train.
But as the number of private vehicles on the roads increases year by year, and the country's residents are forced to stand for long hours every day in unreasonable traffic jams on Israel's roads, more and more passengers see public transportation as a good option. The Ministry of Transportation and Road Safety often boasts about the growth figures for the number of public transportation users, and indeed, in the last decade the number has climbed by 35%, and that's even before the light rail entered our lives.
