By Shane McGinley
Expected hike never materialises; tenants still choosing to commute by car.
Properties located near Dubai Metro stations have not seen the expected hike in rental rates that was initially anticipated when the new transport network opened in September last year, a Dubai-based real estate executive told Arabian Business.
“Since the metro came onboard it is fantastic but I expected the prices to be higher for the areas that the metro was but it doesn’t seem to have happened,” Leah James, a manager of residential sales and leasing at the Better Homes real estate agency, said on Sunday.
James said she had expected rental rates for properties near the metro stations to rise by at least AED10,000 ($2,722.87) a year but that they were only seeing small rises of an average of around $5,000 ($1,361.43) at most.
She added that she believes this is the case because most people who use the metro live in the outskirts of Dubai and white collar, Western expat workers are still opting to use their cars and are therefore not willing to pay higher rates to live near the stations.
“Prices next to the metro line are too high for people who use the metro,” she said.
However, she was confident that when all the metro stations are open it might have more of an impact, especially in Dubai Marina.
The remaining works on the stations on the Red Line will be completed in April 2010, and all works in the stations on the Green Line will be completed in August 2011, a senior official from Dubai's Roads and Transport Authority (RTA) announced in a press release last month.
Mattar Al Tayer, chairman of the board and executive director of RTA said that the contractor of the Dubai Metro Project; Dubai Rail Link (DURL) Consortium; is set to complete all the remaining works on the Red Line (18 stations) on April 25 this year.
All works in the stations on the Metro's Green Line will be completed in August 2011, he added.
"The operation of Red Line stations will be in phases starting from April 25th, 2010; where several key stations will be operational; namely Emirates Station, Airport Terminal 1 Station, GGICO Station, Al Karama Station, World Trade Center Station, Marina Station, and Ibn Battuta Station. The remaining stations will be operated over the following months of 2010" Al Tayer said.
More than 842,000 people used Dubai’s public transport systems a day on average last year, official figures reveal.
The number is set to rise in 2010 with the full opening of the Metro’s Red Line next month.
About 35 million passengers are forecast to travel on Dubai Metro this year.
Why raise the rent at the Metro stations when most of them are still closed and cannot be utilized. When is the new date that they now provide when they expect to pay the contractors who will then allow the remaining stations to open up?
It was patently obvious that the Metro would not be used by white collar expats, so why the surprise that rents didn't skyrocket? A little bit of professional research would have sufficed. This nonsense, just when it seemed the real estate sector had woken up to be transparent and smarter.
Another reason for this could be is that the metro doesn't really serve a purpose for a city like dubai. it may provide a cheaper alternative for those who find the cost of running a car too much, but in reality the metro is a huge white elephant of dubai. 1. it only really serves a purpose if you happen to live right next to a stop and your office is within walking distance of a stop 2. the server buses do not always go all parts of dubai 3. the time wasted using taxis & server buses to get to a metro station is not efficient at all 4. it has, or will, become a great tourist gimmick that will provide a cheaper mode of transport from one shopping mall to another It is probably due to the above points that in reality a big hike in rental prices for a property near a metro station is completely unjustified. as the metro really isn't a life changing mode of transport for dubai residents then rents should really remain the same as they were before it was built.
Just like the buses, the metro will mostly be used by the less privileged section of society. Another major blow to the still very high commercial and residential rents all over the city.
I find the metro serving those of mostly visiting shopping malls, and a few others commuting far distances ( say between Deira and Jebel Ali) and still yet getting to the station from home and to offices you need to take either a cab or rely on buses whch is quite time consuming, not mention the cost of travelling -both the metro ticket and taxi fare. So where is the practiciality ? It is absured to expect the rents to go high for those residential buidlings located right next to metro stations. Are you saying the prices for the buidlings next to all the bus stations are any higher than those located away from the main highways ? I doubt ...
This article is a classic example of hype created by media and later denial of it, along with vested interest like property business companies. This article is smoke without fire, even this news comes at the time when only a portion of metro is open and market is in a flux. In Dubai, one can get a community living 2 bed room at 45K , Community living is a concept which is alien to cities like Sharjah /NE. Abu Dhabi is in the process. Thus Dubai, with its good add-ons like excellent Education, Health is a better option then anywhere in ME. Thus one has to pay for better life. I have seen Children studied in Dubai are doing well generally. With rents as above it is just making sense.
"The operation of Red Line stations will be in phases starting from April 25th, 2010; where several key stations will be operational; namely Emirates Station, Airport Terminal 1 Station, GGICO Station, Al Karama Station, World Trade Center Station, Marina Station, and Ibn Battuta Station. The remaining stations will be operated over the following months of 2010" Al Tayer said." Then... The number is set to rise in 2010 with the full opening of the Metroâ€™s Red Line next month. "The remaining stations will be operated over the following months of 2010" and "...the full opening of the Metro's Red Line next month" tend to contradict each other some what...
Another generalisation - I moved from Mirdif a few months ago, but from the time the Metro opened until I moved at the beginning of January, I was using it three days a week to travel between Rashidiya and DIFC. I loved it - except for the stupid loop music. I drive a nice car, but the opportunity to get out of it, sit and read, listen to music and walk in the fresh air was such a change - I am missing it terribly now, but as I now live in the Motorcity, the likelihood of enjoying a train journey anytime soon is unlikely. Roll on blue, purple and flashing neon pink line.
The reason they have not gone up is because there are plenty of vacant units out there in Dubai now. Rents and prices of units will rise when demand rises and at the moment there is no demand. When everything is full one can see rents rising due to demand for location. Will be a while before we see demand like it was before (If ever that is)...
It is too early to see a difference in rent prices due to the vicinity of a Metro station. The whole net work needs to be operational first and demand has to pick up. I now always choose a short term rental or a hotel close to an opened Metro station, when visiting Dubai. Also, as a resident of Paris, I am used to using the metro.