The inevitable link between the Dubai Metro Blue Line and real estate

In economic geography, one fundamental principle is that constructing a specific structure or hub in an area can catalyze economic activities. Poised to exemplify this principle is the Dubai Metro Blue Line. Apart from reducing traffic and boosting connectivity, it will further invigorate the city’s already bustling real estate scene.  

 

What is the Dubai Metro Blue Line?
 

Dubai Metro, the city’s rapid transit rail network, began operations in 2009. It has 53 stations spread across the Branch Line, Green Line and Red Line. Late last year, it was announced that the transport system would expand with 14 more stations via the Dubai Metro Blue Line. The $4.9 billion project is expected to be completed in 2029, according to the Dubai Road and Transport Authority. If the deadline is met, it will coincide with Dubai Metro’s 20th anniversary. 

 The new line will add 30 kilometers to the Dubai Metro, zipping around major areas. These include Dubai Creek Harbour, Festival City, Global Village, Rashidiya, Warqa, Mirdif, Silicon Oasis, Academic City and more. It will serve 1 million residents and accommodate 200,000 passengers per day by 2030. A decade later, it’s predicted to cater to 320,000 passengers daily. 

 

The transport-real estate connection
 

According to Statista, the real estate sector makes up 8.2 percent of Dubai’s gross domestic product. And based on research, there’s an inevitable link between real estate and transportation. 

A CBRE report shows that in Dubai, properties close to metro stations, especially within a 15-minute walk, tend to have higher price and rent increases compared to the broader market. From 2010 to 2022, prices of homes near the Red Line metro stations rose by 26.7 percent on average, more than Dubai’s overall 24.1 percent increase. The homes 10 to 15 minutes from these stations saw the biggest growth, with prices up by 43.8 percent.  

For rentals, rates near these stations increased by 5.7 percent from 2018 to 2022, while Dubai’s average rents fell by 4.1 percent. The highest rent increase, 11.7 percent, was also in the 10- to 15-minute walk zone. 
 

How the Dubai Metro Blue Line will affect real estate value
 

With the transport-real estate link clearly established, it’s only a matter of time before Dubai sees the impact of the Dubai Metro Blue Line. The most notable is the twin effect of increased demand and price. 

The new stations will substantially boost demand for properties in nearby areas. Jebel Ali, Dubai Marina and Jumeirah Beach Residence – all along the Blue Line – will see more consumers wanting to get a piece of real estate there. As the Dubai Metro offers quicker access to the city center, locations near metro stations grow more attractive. This applies not only to residential properties but even to commercial ones.  

 Furthermore, as demand for Metro-connected areas rises, there will be a corresponding increase in property value and prices – and rents. 

According to Wael Makarem, the senior market strategist for Exness MENA, “Prices and rents could rise faster proportionately to the proximity to actual metro stations in all the areas where the new metro line will be built.” Historically, areas close to metro stations have seen faster and higher increases in prices and rents compared to other areas, he added. 

“The estimated surge in rents and prices could range between 10 and 25 percent,” said Ayman Youssef, managing director at Coldwell Banker. 

 “If the current trend remains unchanged, we can project a higher increase in Dubai Creek Harbour as the market is focused on quality and integrated communities. Dubai Silicon Oasis comes next as a very well-priced area for the middle class,” Youssef added.

 

Source Link: https://economymiddleeast.com/news/dubai-metro-blue-line-real-estate/