According to a recent report by global consultancy CBRE, residential properties in Dubai that are only a short walk from metro stations have outperformed the wider real estate market in the emirate, both in terms of sales price and rental performance. CBRE’s Dubai Metro Report 2023 reveals that residential units within a 15-minute walk of the emirate’s transport network that began operations in 2009 have the potential to continue outshining the broader market.
The report shows that average prices of residential units in Dubai increased by 24.1% between the first quarter of 2010 and the fourth quarter of 2022. However, residential units within a 15-minute walk of a metro station recorded an average rise of 26.7% over the same period. CBRE notes that there are differences in performance across the different proximity categories, with units within zero-to-five and 10-to-15 minutes’ walking distance showing “marked levels of outperformance compared to the Dubai average”. These proximity categories saw price growth rates of 35.8% and 43.8%, respectively.
In contrast, average prices for properties in the five-to-10-minute proximity category increased by only 0.2%, which the CBRE said was largely due to “lacklustre performance in price growth in secondary locations, which have tended to consist of affordable stock with limited amenities and urban infrastructure”.
However, residential communities within the five- to 10-minute distance from a metro station with modern amenities and quality urban infrastructure, such as Jumeirah Beach Residence and Dubai Marina, have bucked this trend and recorded price growth of 40.5% and 35.9%, respectively.
“Going forward, developers will have to increasingly focus on the provision of suitable urban infrastructure around their development, which will include, but not be limited to, walkable, scooter and cycle-friendly neighbourhoods and mixed-use and non-concentric developments to help achieve similar performance levels,” said Taimur Khan, head of research at CBRE.
Apartments in Downtown Dubai that are within a 15-minute walk of a metro station recorded an average price increase of 47.4% between the second quarter of 2010 and the fourth quarter of last year. Average sale prices for apartments in the broader Downtown area reached Dh2,160 per square foot, while those within a 15-minute walk from the metro averaged Dh2,730 per square foot over the same period.
As Dubai continues to mature, the proximity factor will become one of the vital fundamentals in driving the outperformance in the future, according to Mr Khan. “We can already see this change in fundamentals being played out, where early evidence suggests that developments which have such conducive urban infrastructure and boast proximity to the metro are already significantly outperforming both on price and rental terms.”
CBRE evaluated 74,000 residential sales transactions between the first quarter of 2010 and the last quarter of 2022 to compile the report. Within the rental market, the consultancy studied close to 112,000 Ejari rental contracts. However, since Ejari data is currently available only from the first quarter of 2018, it does not have the rental premiums or performance achieved since the inauguration of the Dubai Metro in 2009.
Average rents for properties within a 15-minute walk of a metro station increased by 5.7% between the first quarter of 2018 and fourth quarter of 2022. In comparison, the average rent rate across Dubai decreased by 4.1% during the same period. CBRE noted that “another notable finding has been the level of outperformance key residential hubs have recorded. Properties within 15 minutes
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