Apartments located nearest to the metro station in JLT and Al Furjan are now commanding a premium of up to 30%.
Renting an apartment near a Dubai Metro station in JLT or the emerging residential hub of Al Furjan will likely require paying up to 30 percent or more compared to units slightly farther away. In Dubai’s increasingly competitive property market, the Dubai Metro’s presence is significantly impacting residential rents in these areas. The rental disparity between properties near metro stations and those further away may continue to widen.
Since its introduction, the metro has consistently influenced demand and property values/rents in areas surrounding its stations. A recent report from Reidin-GCP highlights that proximity to metro stations is now a key factor determining rental prices.
In Al Furjan, two-bedroom apartments are now commanding rents of Dh80,000 or higher, depending on their proximity to a metro station. Units in recently completed buildings are pushing asking rates close to Dh100,000.
Rental rates closer to metro stations remain consistently higher, whether the line is a new addition (as in Al Furjan) or where stations have been established for some time (as in Jumeirah Lake Towers).
In JLT, the spectrum of two-bedroom options is extensive, encompassing listings ranging from Dh105,000 to Dh180,000.
Leasing agents anticipate significant activity in Dubai’s rental market post-Eid, as leases expire and incorporate the updated RERA Rental Index average rates. “Even without the adjustments to the RERA index, there is a noticeable trend towards double-digit increases in rents,” noted an agent managing apartments in Dubai Marina and Business Bay.
“In the upcoming weeks, more tenants will be faced with the decision of whether to renew their lease or seek accommodation in a different area of the city.
It’s evident that there is a scarcity of rental options that are appropriately priced. The city continues to attract new residents, leading to situations where incoming tenants are paying higher rents for one- or two-bedroom units compared to existing tenants in two- or three-bedroom apartments within the same building.”
‘Metro effect’ in upmarket locations
When considering areas like Dubai Marina or Downtown, the proximity to the station becomes relatively insignificant. In Dubai Marina, the rental variance for a two-bedroom unit is merely 3 percent, while in Downtown, it’s around 6 percent. Similarly, in Business Bay, the distinction between being adjacent to the metro station and being farther away is only 3 percent. (In all three locations, rental rates have increased uniformly by 30 percent over the past three years.)
Selling prices and the Metro
One might have expected that with the high demand for rentals near Metro stations, selling prices for such units would have surged as well. However, recent transaction data indicates that owners of apartments in these buildings are more inclined to hold onto their properties rather than sell. Many of these owners could be end-users, or they might be waiting for values to increase further before deciding to sell. According to the Reidin-GCP report, apartment buildings farther from the metro station tended to experience higher sales velocities compared to those closer. This suggests that proximity to the metro reduces the willingness to sell, a trend that is not reflected in sales price data.
“In JLT, apartment buildings farther from the metro typically experience higher turnover rates among occupants consistently since 2019, reflecting variations in the metro’s impact on the Dubai property market, contingent upon whether the focus is on purchasing or renting.”
