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Residential property close to Dubai metro outperforms market

18 April 2023

Residential properties in Dubai that are situated within a 15-minute walking distance from metro stations tend to outperform the broader real estate market in terms of both property value and rental performance.

This is according to a report by global real estate advisory firm CBRE, which examines the effect of the Dubai Metro on residential prices and rental rates.

In terms of sales market performance, the 2023 Dubai Metro Report concluded that properties within a 15-minute walk from a Red Line metro station experienced an average price growth of 26.7 per cent between the first quarter of 2010 and the fourth quarter of 2022, surpassing Dubai's average increase of 24.1 per cent during the same time frame. Properties within a 10-15 minute walking distance recorded the highest price growth rate, averaging 43.8 per cent.

Rental market

With regards to the rental market, CBRE found that the average rental rates for properties within a 15-minute walking distance of a Red Line metro station rose by 5.7 per cent from the first quarter of 2018 to the fourth quarter of 2022.

In contrast, Dubai's average rental rates decreased by 4.1 per cent during this period. Properties within the 10-15 minute walking distance category also exhibited the highest rental growth rate, with an average increase of 11.7 per cent.

READ MORE: Dubai’s vision for a 20-minute walkable city

Taimur Khan, head of research – Middle East and North Africa at CBRE in Dubai, said: "Our research indicates that residential properties within a 15-minute walking distance from metro stations have the potential to significantly outperform the broader market in terms of both rental and property value. However, as Dubai continues to mature, this proximity is progressively becoming only one of the factors contributing to this outperformance.

"In the future, developers will need to place greater emphasis on the creation of suitable urban infrastructure surrounding their projects, including walkable, scooter- and cycle-friendly neighborhoods and mixed-use, non-concentric developments to achieve similar performance levels.

"Preliminary evidence suggests that properties with such supportive urban infrastructure and proximity to the metro are already significantly outperforming in terms of both price and rental rates."

Network expansion

Dubai is planning to expand its metro network. The Roads & Transport Authority (RTA) expects to issue tender documents this year for the Blue Line.

This project aims to extend the existing Red and Green lines, enhancing connectivity throughout the city and fostering further growth. With at least three consortiums preparing to bid for the project, the extension plans are expected to create new opportunities for businesses and residents alike.

The Green Line extension will commence from its current terminus at Creek station in the Jadaf area, crossing over to the Dubai Creek Harbour development and continuing through Ras al-Khor, International City, Dubai Silicon Oasis and Academic City before concluding near the Desert Rose project.

Meanwhile, the Red Line extension will connect its existing terminus in Rashidiya to Mirdif City Centre and continue through Mirdif and Warqaa before joining the Green Line extension in International City.

UK-based Atkins and Grimshaw, US-based Parsons and France's Egis resumed design work on the project at the beginning of 2022 after initially being awarded the study and design of the two extensions in 2019.

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Colin Foreman

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