Dubai Metro impact on house prices may take 5 years - DTZ

Wednesday, 30 September 2009 2:13 PM

Homes and offices located next to the Dubai Metro could see price uplifts of 20 percent but it may take up to five years to happen, a global real estate advisory firm said.

A report by DTZ said both residential and commercial properties within 400 metres of the city's new rail system could benefit by between 10-20 percent.

But Andrew Edwards, associate director at DTZ and author of the report, added that the price impact would not be even across the station network.

He said: "If the Dubai Metro proves popular and efficient then it is very likely we will see a significant impact on the values around stations. As a general rule, the larger the modal share (the percentage of people using the Metro in relation to other forms of transport), the larger the impact on surrounding values.

"The early signs have been positive. DTZ considers the potential uplift in the immediate vicinity of the Metro stations...could be in the region of 10-20 percent for both residential and commercial uses.

"Furthermore, those price hikes may not be seen immediately and it will take time for the Metro to be widely used and the accessibility benefits to be understood. In some cases, it has taken three to five years for price uplifts to filter through."

Edwards added: "The impact is likely to be more significant at certain destinations such as Jumeirah Lake Towers for residential and Dubai International Financial Centre for commercial. This is because there is a high concentration of residential use at JLT and commercial use at DIFC which is likely to translate into a high level of trip generation."

The report suggests that the current state of the property market was also a major factor and if it was in a downturn, the degree of accessibility would be irrelevant as prices were still likely to decrease.

DTZ added that Central Business District (CBD) locations were less likely to benefit from large uplifts because they were already accessible before the Dubai Roads and Transport Authority launched the metro on September 9.

One of the key findings of the report, DTZ said, was that land use and development was likely to change in Dubai as a result of the Metro with future development more concentrated within walking distance of the Metro stations.

DTZ employs more than 10,000 staff across 148 cities in 43 countries.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Read All 15 Comments

Posted by: nike Sunday, 4 October 2009 12:51 PM[UAE] - uae

well, if thats the case, then how can they call themselves the UNITED ARAB EMIRATES ???? if they cant even work towards a common goal of uniting the roads of all emirates and linking them together with a common rule or any transport network ?Dubai thinks only about itself, so does Abu Dhabi, and consequently so do all the other emirates. so how can they call themselves one country when all have separates rules and legislations for their respective emirates?

Reply to this comment.

Posted by: Mike Charlie Mike Thursday, 1 October 2009 5:41 PM[UAE] - UAE

I love the statistics that get thrown at, or into this market. Stats in isolation tend to reflect the interest of the person who crunches the numbers... or gets them off the web and claims expertise. I would enjoy seeing stats for crime and also time and motion predictions of pedestrian congestion and how the incidence of pedestrian congestion near train "metro" stations will adversely (or not) impact other vehicular / pedestrian issues. I will bet commercial operations and small stores will definitely see an increase in value as the potential customer base near the stations will be more concentrated. However, I fail to see the attraction of living right near a metro station that ensures that 1000?s of people will now be massing near my door step at peak hours. Maybe it?s just me, but falling of the train and being able to crawl to my pad at 0300 hrs is no longer viewed as an advantage when choosing a domicile. There may be more traffic and parking problems, pedestrian vehicular encounters, and possibly an increase in crime near major originating / ending stops. I will bet that at 0800 hrs on the morning when the stations in Al Quasais open, 60000000 cars and people from Sharjah will be battling to park and get on the nearest train. As blogged below, they are already battling the streets there in the morning sans train in a case of Salik Avoidance. I am sure there are nice stats out there for that somewhere from a country that has one or two trains running. Disney Excluded? Parking near businesses that are near metro stations will get even worse. Do you expect all the passengers of the metro to use the end of the line stations where there is adequate parking? An individual who lives in Satwa, will not drive or ride to Rashidiya to park and catch the train to go to Diera? Perhaps I am mistaken, but unless you are living in a VERY prime location; and the train is underneath your feet and not elevated; if you live next to the tracks you are either a hobo, homeless or are in a low budget situation. I don?t recall anywhere else in the world where residents (not businesses) ever truly benefited from living right next to or under a mass transportation hub, unless you also owned the hot dog stand on the sidewalk. I am not a real estate statistician (thankfully) and I am probably wrong. SO if they raise the rent for the sake of the train, and believe me some will, I might have to join those living under the tracks. The next thing we will hear is that the planes doing low flying passes over Mirdiff are part of the experience and for that free and prestigious entertainment we should pay more. Well at least there I can literally see if my wife?s flight is on time without having to brave the mob at the arrivals? now that might just be worth 20% more!

Reply to this comment.

Posted by: James callaghan Thursday, 1 October 2009 5:13 PM[UAE] - USA

Dear Dod, Sharjah Dubai commutation will never ever become normal because the rental income in Dubai is related to it. When I was in Sharjah 10 years back, the mamzar road linking sharjah / dubai intersection was completed and was opened to public. Amazingly, the traffic became almost 0 because people started easily commuting from sharjah/dubai/sharjah. The road was opened I think for a few days. During that period, it was a history that lot of people from Dubai moved to Sharjah, which created a panic amongst the great money minting landlords in Dubai who used their influence and got the road closed to public. So Dubai/Sharjah traffic issue will never get solved. It is a proof that till today there is not even a single bus introduced on that route whereas you have a lot of buses in the connecting various locations in Dubai.

Reply to this comment.

Posted by: Dod Thursday, 1 October 2009 4:28 PM[UAE]

Thanks, I was interested as there is a chance I could start cummuting to Sharjah from Dubai. As it's against the traffic (and hopefully all lights are green going that way) I would hope the trip would be easy

Reply to this comment.

Posted by: Puma Thursday, 1 October 2009 2:26 PM[UAE] - UAE

Hi Dod, well first of all let me tell that i do not live in Dubai any more, I moved to Abu Dhabi 3 years back, but I still have friends in Sharjah and Dubai. What I was inferring was that Dubai has kept a very short duration for green signal, allowing very few cars to enter Dubai during one green signal causing massive traffic build up on Sharjah side. I know many people who moved to Dubai after the rents came down, only to get rid of this traffic mess from Sharjah. If commuting became easy, many might move back to Sharjah where living is much cheaper than Dubai, leaving Dubai with more empty apartments. Have a nice weekend.... cheers

Reply to this comment.