Dubai: Whether the cost of renting and buying apartments in Dubai has become more or less expensive, one thing is certain: you’ll pay a premium if you choose to stay near a metro station.
According to a research conducted by advisory and consultancy firm ValuStrat, investors, tourists and tenants in Dubai are likely to spend more on housing if they opt for an accommodation that’s very close to or within five to ten minutes walking distance from the Dubai Metro.
Prices can go up by 10 to 20 per cent for rental properties, and, in some cases, more than double for housing units on sale. The good, thing, though is that the thousands of expatriates living near the metro get to save more money on the various costs of using a car, such as Salik, parking and maintenance fees.
The findings were based on a review of apartments listed in the Jumeirah Lakes Towers (JLT) area, one of the most popular communities for expatriates today.
ValuStrat’s research showed that studio apartments near a metro station in JLT are also difficult to find and can command a price of around Dh750,000 to Dh900,000, a far cry from the studios in Jumeirah Village Circle or Dubai Silicon Oasis which are being offered for a little over Dh400,000.
“A wider choice of apartments was found available farther away from the stations, most offered as fully furnished and more importantly the prices were similar or even slightly discounted with the added benefit of furniture included,” ValuStrat said.
For rental properties, ValuStrat said, the situation is the same: there are hardly any apartments available near a metro station and the asking rents can be ten per cent to 20 per cent more expensive. Asking rents for studios average Dh75,000, compared to Dh68,000 for similar units a bit farther away.
One-bedroom apartments for rent, however, command less than five per cent premium, but still the supply is lacking.
”Prices for studio apartments within five to ten minutes walking distance commanded a premium of up to 20 per cent. You can expect to pay an extra Dh150,000 for the privilege,” said ValuStrat research manager Haider Tuaima.
ValuStrat also looked at the availability of apartments in Dubai Marina and other non-freehold locations and the company concluded that house search can prove difficult for a buyer or tenant.
In Al Qusais, most accommodations available are located more than ten minutes walking distance from a metro station. More options are available farther afield that require feeder buses, such as Al Nahda and Al Muhaisanah areas.
”We find much less choice for properties within a five to ten minutes walk to a Metro station, as these properties enjoy lower vacancy rates and landlords don’t have to work too hard to market them,”Tuaima said.
ValuStrat also found that the same situation applies to hotels near metro stations.
“We found that hotels also benefited from the Dubai Metro. Hotels closer to the stations had less vacancy and commanded higher room rates.”
The company said their findings only show that while the Dubai Metro is only about five years old, it is already causing property values to go up. “This impact is likely to continue as it has with more mature cities, such as London, Manchester and Glasgow.”