The Blue Line of the Dubai Metro will have a huge impact on property market development in the long run and the city’s urban expansion, an impact seen with previous metro expansions. The mega-project is in line with the Dubai 2040 Urban Master Plan realities and the Dubai Economic Agenda D33, which seeks to enhance sustainable mobility and urbanism.
The Blue Line is likely to drive demand and rise in the rental values of the 9 major nodes it operates in. Metro stations have historically contributed to increase in sale prices and rents in the immediate vicinity, compared to the whole market. Analysts predict that it would bring a 10-25 per cent increase in prices and rents due to metro connectivity. Real estate on the Blue Line is expected to attract more consumer demand.
Metro rail has always been a strong value driver. After the Red and Green Lines opened, neighbourhoods near stations saw more than 50 percent growth in housing prices from 2010 to 2018. The predicted dynamism that the Blue Line will bring may very well herald a new dawn around locations such as Dubai Silicon Oasis, Mirdif, Warsan, Dubai International City, and Academic City. These affordable communities, are expected to transform to the next targeted real estate hotspots -especially for the young families and professionals looking for the balance of value and accessibility.
Sites within 10 minutes walk of the new stop locations could prove to be even more in-demand, as owner-occupiers and investors would look to benefit from future value increases. Once train services start, these sale prices would likely fetch up to 15 per cent more than those located further away from the stations. Rental prices, too will increase, but it might be longer down the line as tenants tend to wait until follow through on infrastructure is wrapped up before leaping on board. Traditionally, properties located in the vicinity of metro stations have commanded premium rental yields, while vacancy rates were lower and resale moved faster.
Studies on the current Dubai metro system showcase a concave relationship between residential property price and distance to the nearest station. This implies that the environmental externality is negative as you move close to a station and that very close properties (e.g., within 0.5 km or 200-500 meters) would also face a negative impact due to noise (e.g, -9% or -6%). But the most positive effect on home values in an area (about 13 per cent) is seen in the case of properties situated between 700-900 meters of the metro station. The impact for commercial properties is generally positive and much larger at most distances, notably it reaches a peak increase of approximately 76% for properties at 700-900 meters. Unlike for residential property, the coefficient is positive and of a higher magnitude even for properties located near to the metro, because the negative externalities – such as noise at the station – are less relevant for commercial users.
With the Blue Line suddenly becoming more accessible, we’re already witnessing an uptick in off-plan releases in the areas it covers, meaning there’s an increasing appetite for units in these connected enclaves. Builders are already betting on the expected demand, with more than 100 projects in the development pipeline. This is in line with the anticipated city-wide population increase.
As suburban infrastructure like the metro expands, there will be more attention towards affordable housing. Taking into account Dubai’s burgeoning middle class and continued demand due to liberalised visa policies, developers will reportedly bring more affordable options to market in locations such as Al Warsan. Al Warsan, for example, is already labelled as an up-and-coming hot spot with affordable property prices and improving infrastructure, and one of the areas where developers are tipped to come up with more affordable projects.
The Blue Line is an integral part of the Dubai 2040 Urban Master Plan and Dubai Economic Agenda D33. The principle behind it is to create the “20-minute city” in which 80% of what residents need is available within 20 minutes travel time on public transport that actually works.
The 30 km line with 14 stations will allow people to avoid traffic congestion and save time on some of the most popular, high traffic areas across the Dubai including: Dubai Creek Harbour, Dubai Festival City, Al Jaddaf, Dubai Design District, the Mall of the Emirates, and also the site of Expo 2020 and Interchange 2020, Dubai Airport, Dubai Silicon Oasis, the world’s first nature inspired mall, City Centre Mirdif, Academic City and the Silicon Oasis. This supporting infrastructure is estimated to reduce traffic in Dubai by 20% and simplify the lives of residents, the workforce and visitors, enhancing Dubai as a place of work, residence and tourism, the statement added.
Truth is, urban infrastructure projects like the Blue Line tell the market that you’re in it for the long haul. It will motivate mixed-use developers to re-evaluate and strategic-sell plots of land near upcoming stations and make more visible the long-term upside. Star developments such as Nakheel’s Warsan Village and Dubai Creek Tower by Emaar are positioned to leverage upon the connectivity of the Blue Line.
The enhanced connections will change demography in some locations. For instance, the ease of travel from the metro to the Dubai Academic City will help reduce commute times for students. The line will benefit the city’s tourism industry as it will offer better connectivity for tourists travelling to and from the airport, notably to and from Dubai Marina. Closeness to industrial areas and logistics parks which has emerged in regions like Al Warsan, could draw more commercial and warehousing businesses, in turn each creating more real estate investment.
In conclusion, the Blue Line is so much more than a line, It is an enabler of urban development that will be coveted in the new world order, driving demand and property values, cementing new neighbourhoods in the line of the Emirate’s vision for sustainable development.