Will the Metro Green Line push rent prices upwards?

The story

The opening of Dubai Metro's Green Line has certainly brought cheer to the lives of many people residing in Dubai as well as in neighbouring Sharjah. Several residents who depend on car pooling and buses to get to work and back are contemplating relocating to buildings closer to the new line.

For real-estate professional Iqbal (name changed on request), commuting to his workplace in Bur Dubai from Al Qusais was a nightmarish affair until recently, taking as much as one-and-half hours. Since the launch of the Metro line, he has shaved almost an hour off this time. "Earlier, I used to start at 6.45am and reach the office by 8.15am, but now it takes only about 35 minutes," says Iqbal.

He is planning to move to a building closer to a Metro station in December when his lease contract expires so that he can simply walk to the station. At present he depends on feeder buses to reach it, although normally these do not take more than ten minutes.

While Iqbal's feelings are shared by many residents in areas close to the Green Line, Sumod Mohan, who works in Downtown Dubai and lives in Sharjah, is equally pleased. The commute to his work used to take him more than two hours but has been reduced to about 50 minutes.

"I live in Al Nahda and used to depend on car pooling until recently. I started using the Metro as soon as it was opened to the public. The only problem I am facing now is that I have to walk to the closest bus stop on the Dubai side to take a feeder bus to the station," says Sumod. He is considering moving to Dubai where his next home would be closer to a Metro station, even if it meant shelling out a few hundred dirhams extra per year.

Why it could affect you

While most real-estate agents who manage buildings located along the Green Line say there has not been an increase in rents in these buildings despite receiving quite a lot of enquiries since the launch of the new line, things might change in the coming days.

While it would be good news for landlords, those who are living in the area will be keeping a close watch on the rent rates.

In addition, if more and more people prefer to live closer to the Metro, buildings located far from the stations could witness a dip in demand, which might cause the rents to fall over a period. This, in turn, might inspire those with cars to move to better units at better rents.

Agent's explanation

Sanjiv Ratnani from Rocky Real Estate:
“After the Green Line was launched, we received quite a few calls from tenants in Dubai, especially those who depend on car pooling to get to work. They were looking to rent apartments closer to the line simply because it is more convenient and offers them an alternative to car pooling. Currently, rents are more or less stable in this area. A one bedroomed apartment in a building with window ACs in Al Qusais, close to the Green Line, is anywhere in the range of Dh28,000 to Dh32,000, and in buildings with centralised AC, the rent for a similar-sized home will be about Dh32,000 to Dh42,000, depending on the facilities and quality. Availability could be an issue in the future. We have about 30 buildings along the Green Line, but only a few units available now.”

Our take

Although rents haven't shown any deviation so far, being closer to the station is going to be a huge plus for owners of units in these areas. It's likely the launch of the Green Line is going to have a positive effect on the real-estate sector in the areas alongside the line as far as landlords are concerned, and this will be driven primarily by people who are now dependent on car pooling.

Those who are unsure whether to relocate to a building closer to a station may have difficulty in finding a suitable apartment later because of increased interest in these areas.