Research: Proximity to Dubai metro boosts residential property value

02 May 2023 Consultancy-me.com 3 min. read

Proximity to Dubai’s metro system provides a boost to the value of property, according to analysis by real estate consultancy CBRE on transactions since the metro’s inception.

Launched in 2009, Dubai’s metro system today spans a track of 90 kilometres across 50+ stations. More than 200 million people – locals and tourists – made use of the metro system last year.

The research by CBRE has found that living close to a metro station not only adds to the comfort of those that commute by metro, but also comes with a financial benefit: homes located within a 15-minute proximity to metro stations carry more value, both in the purchase and rental segment.

Research: Proximity to Dubai metro boosts residential property value

For its analysis, CBRE assessed the sale and rental value of homes within a 15-minute proximity to metro stations, and compared their performance to Dubai’s average. The analysis focused on the Red Line (35 stations), which runs from Rashidiya in the east to Jebel Ali in the west and travels parallel to Sheikh Zayed Road for most of its length.

To ensure that its analysis is not prone to short term developments and shocks, the researches gathered data stretching back to the metro’s inauguration fourteen years ago. More than 74,000 residential sales transactions were analysed, and close to 112,000 rental contracts.

The main conclusions speak for themselves. While average residential property prices increased by 24.1% between 2010 and 2022, prices of properties within the 15-minute metro proximity grew by 26.7%.

Research: Proximity to Dubai metro boosts residential property value

Deeper analysis found that there are notable differences between communities. The monetary value of villa’s, apartments and homes rose by much more in places such as Barsha Heights, Jumeirah Beach Residence, and Barsha Heights – areas where the price hike is inflated through a range of other factors such as the quality urban infrastructure, modern amenities, and demand for luxury properties.

In the rental market, the exact same trend has been uncovered. Between 2018 and 2022 (the shorter span of the analysis is according to the researchers due to data availability), average rental prices in Dubai rates decreased by 4.1%. However, home owners within the 15-minute metro proximity saw their average rent increase by 5.7% – marking a near 10% difference.

Research: Proximity to Dubai metro boosts residential property value

Taimur Khan, Head of Research at CBRE, said the research confirms a feat that has been pretty well known all along. Globally, dozens of research papers have over the years demonstrated a positive correlation between metro proximity (or public transport proximity) and residential property value, with Dubai now aligning to these results.

“Our study shows that developments within a 15-minute proximity to metro stations can substantially outperform the wider market, both in rental and price terms.”

However, Khan added, “this proximity is only a part of the fundamentals which drives this outperformance. There are so many variables that piece the residential property value puzzle.”