Business | Property
Station-lined properties gain an edge
A cursory check with local agencies reveals that current rental enquiries centre around properties close to Metro stations in the city
- By Iona Stanley, Contributor, Property
- Published: 00:00 October 1, 2009
- Image Credit: Kishore Kumar, Staff Photographer, Property
- Proximity to Dubai Metro is likely to help units command a premium rent compared to those away.
Many of Dubai's self-appointed analysts can reel off an impressive array of numbers, percentages and statistics about domestic realty, without being specific about any. Accordingly, they will have you know that at any time prices could be falling or rising, the ‘bubble' could be thoroughly deflated or building itself up into another giant puff, and the market could be on the verge of further disaster or imminent recovery. So on and so forth.
Call it spin doctoring or soothsaying, local residents have learnt not to pay heed to the staggering number of reports being churned out at regular intervals, or to consider any one of them more seriously than the others. In spite of this sceptical mindset, there is one fact that analysts, developers, agencies and residents themselves have all come to agree upon — all homes located close to the Metro stations can, and will, command higher values and rentals than those less favourably placed. As this price rise is already being experienced, the ‘Metro effect' will undoubtedly be analysed to its finest minutiae.
Although it comes as no great revelation, the city is still coming to terms with its full impact. An increase in real estate prices on projects or developments located close to stations of any rapid transport system in any part of the world is common enough. It is certainly no secret.
Connectivity at a price
In Dubai though, some residents seem to have been taken by complete surprise by the new transportation mode, while resale and rental agencies which had been struggling of late to muster any spark in their sales programmes are now whole-hearted converts to the Metro cause and of properties adjoining it.
Peter James, a freelance realtor, says that units in Jumeirah Lakes Towers (JLT) located directly opposite the Metro station of the same name or close to it can command between six and ten per cent more than those located further away.
Related Links
"Anyone who wishes to sell or rent a unit in Saba Tower l, Indigo Tower, The Palladium, Fortune Tower and Gold Crest Executive can certainly command a premium, and depending on the space and type of unit, this premium can work out to a fairly tidy sum of money that is pure profit," he points out.
A fact vouched for by Arif Rangari, facility manager of ETA Star, and he does so with the use of pertinent examples. Residences at The Palladium and Gold Crest Executive currently command Dh900 to Dh1,000 a square foot, partly because the two buildings are located directly in front of the JLT Metro station. "I believe that across many other buildings in JLT, the price is only Dh700," says Rangari.
From a resident's perspective, A.K., who owns an apartment in Fortune Tower, says that the prospect of commanding a premium rent is pleasing, but totally unexpected. "I bought my apartment even before the Metro project was announced — or perhaps I did not pay much attention to it at the time — and am still waiting for my unit to be handed over," he says.
"Now they tell me that I am sitting on a gold mine. I certainly did not ask for it, but if it has come to me, I am not complaining for sure."
Spurring demand
A cursory check with local agencies reveals that current rental enquiries centre around properties near enough to the Metro stations dotting the city. The trend implies that residents are already beginning to take into consideration the ease of transport when choosing their new homes. But a Metro station does not necessarily always bring good news. Further away, in Ghusais, the D'Souzas are worried that their landlord will increase their rent simply because their apartment building is located close to the station.
"It is not operational yet, but we are already worried that we may have to look for another home next year," the wife says. "All this talk of the ‘Metro effect' is bound to reach the landlord's ears, and he will be tempted to do what others are doing. Convenience is one thing, but the cost of living is another altogether."
Other notes of concern can be heard as well: "If you can afford an apartment almost anywhere in Dubai, you can certainly afford a car," suggests a local blogger, adding, "You are hardly going to slum it on the train, except for that first burst of excitement. Renters beware of false promises." Is this blogger on to something that many property analysts have failed to cotton on to?
More from Property
More from Business
Covering freehold,rentals,investments,market round-up and much more
Business Editor's choice
-
‘Wrong Way' Krugman
The source of our economic malfunction lies with government-mandated bank regulations
-
Greek exit could make Eurozone stronger
Departure will show limits of bailouts and allow remaining members to act much more like a unit
-
UAE upholds values of free trade
Recently released statistics confirm an established fact, namely that of the UAE embracing the free trade principle in general and imports in particular
