Dubai Metro changes the property prices
Dubai Metro changes the property prices. Property prices and rentals around areas connected to Dubai Metro’s Route 2020 will be more flexible compared to the wider market, according to property analysts and industry executives.
They believe that property prices because od Dubai Metro will rise in the medium to long term but not in the short term due to oversupply in the market.
Dubai’s 15 km Route 2020 metro line was formally inaugurated by the emirate’s Ruler and UAE Prime Minister Sheikh Mohammed Bin Rashid Al Maktoum on July 8, although revenue services are not expected to begin until September.
Built at a cost of 11bn dirhams, the Red Line branch has been developed to serve the Expo 2020 site and encourage new housing and commercial developments, but it will later be extended to Al Maktoum International Airport.
The automated metro has been built by the Alstom-led ExpoLink consortium, which includes Acciona and Gülermak. Starting from a four-platform interchange with the existing Red Line at Jebel Ali, it includes 11·8 km of elevated alignment and 3·2 km in tunnel. The intermediate stations at The Gardens, Discovery Gardens and Al Furjan are elevated, while Jumeirah Golf Estates and Dubai Investment Park are underground. The airport extension would add a further 3·4 route-km.
All of the stations are provided with bus and taxi interchanges. RTA says the underground station at Jumeirah Golf Estates is the biggest on the metro network; it is intended to form the centrepiece of a transit-oriented development totalling 360 000 m2 with residential, hotel, commercial, retail and office accommodation.
The manager at Knight Frank, Taimur Khan, says “We have seen that if you have a development in a five-minute distance of a Dubai Metro station, the market increased 51 per cent between 2010 to 2018, and if they are in 10-minute walk, they increased by 58 per cent, and 33 per cent for a 15 minute walk,” Khan said.
He noted that these five areas will see quite significant demand. In these areas the property and rental prices will rise for Dubai Metro.
Firas Al Msaddi, CEO of of fäm Properties, doesn’t expect property prices to increase on Route 2020 areas in the short term, but occupancy will increase.
“Areas connected to Metro 2020 will become more favourable than before. Also, it is something that landlords will look forward to to have a property. I don’t see any rental and price increase because macro fundamentals don’t show any sign of rental or price rise in the short term, which is a good thing because Dubai will become more affordable than ever before and attracting tenants from different emirates as well,” Al Msaddi says.
“In the medium to long= term, Metro 2020 will definitely help increase both rents and prices. Rentals as well as sale price are very much inter-related worldwide, especially in Dubai. If rents go down, sales prices tend to follow because price impacts rate of return that one generates out of the rent,” he added.
Locations near Metro stations tend to hold prices better. The property prices near Metro’s Route will change for Dubai Metro. Since 2014, which is the top year of the market, the broader rental market went down 11 per cent while building within 15 minutes walks of metro station rents increased 1.8 or 2 per cent. That is quite a difference.
Rents could not necessary go up in these Route 2020 areas but will be a bit more resilient because there is a lot more pressure on the market at this time as a lot of supply is coming. Rents are going down about 10 per cent which we haven’t seen for a long time.
Alessandra Quarta Conte