Revealing the project of the Dubai Metro Red Line Extension (Route 2020) to be launched in September this year, the real estate market in Dubai is expected to witness some changes in the Dubai property prices.
The new route linking the city to the Expo 2020 site is a part of “Towards the Next 50 Years” theme. It is going to have seven stations. This 15 km route is designed to cover numerous areas including Discovery Gardens, Jebel Ali, Al Furjan, Dubai Investment Park, and Jumeirah Golf Estate making them more accessible from the main city. Therefore, real estate experts expect significant changes in the rental value and rates of properties located in those areas, albeit in the long run.
As per experts, the market is already flooded with residential developments. An individual seeking a flat for rent in Dubai can have numerous options at their disposal. This is why experts believe that there won’t be a short-term impact on the prices. Instead, property rates and rental value is speculated to change in the mid or long run.
Mr Taimur Khan, serving as the research manager at Knight Frank, is of the view that areas located within 15 minutes of walking distance from a metro station show growth in terms of their price. Stats from 2010 to 2018 depict that a community or development that can be reached within 5 minutes from a station has witnessed an increase in the value of 51%. Similarly, those localities that can be accessed within 10 and 15 minutes, they surged up by 58% and 33% respectively.
CEO of Fam Properties, Mr Firas Al Msaddi, echoes the thoughts of Mr Khan. He also believes that property rates are not expected to see a hike in the short-term duration. However, he predicts that occupancy will improve. As per him, newly linked areas will gain more prominence. Property seekers and investors will also have new areas added to their catalogue.
Mr Msaddi also believes that stability in the rental value can prove to be a good sign. With no increase in the rental price in short-term duration, the city will attract more tenants from other emirates because of affordable residences. At the same time, he said that prices will increase due to the Metro 2020 route in the medium to long-term period. Not only sale prices will be impacted but the rental value will experience a shift too as both these prices are interrelated. They are directly proportional to each other as when the rental value decreases, sales prices also follow suit. This is due to the fact that ROI reduces when the rental value goes down, which, in turn, brings down the value of the property.
Top property finder portals will also have more properties added to their portfolios to cater to their clients.
Shedding light on rentals, they witnessed a surge of 1.8% in the areas that are located near metro stations during the period between 2014 and 2018. This clearly shows that communities and areas located in close proximity to metro stations perform better in terms of prices and rental value.