By Essam Al Ghalib www.gulfnews.com
DUBAI // The opening of the Dubai Metro Green Line spells good news for property owners and bad news for those renting near the 18 new stations.
The opening ceremony for the new line will be held on Friday, with 16 of the stations opening up to the public on Saturday. The other two will open soon after.
Property values are expected to rise substantially, leading to possible rent increases of up to 25 per cent.
“The Dubai Metro has added a whole new market dynamic and as the network is rolled out across the emirate, the rental disparity will become even more pronounced than it is already,” said Elaine Jones, chief executive of the property company Asteco.
Proximity to a metro station is becoming a priority for many tenants, who are prepared to pay up to 25 per cent more for it, Ms Jones said.
Asteco said a small property in Deira within walking distance of the Green Line would now command an annual rent of Dh50,000, whereas a similar property farther away could be leased for as little as Dh40,000.
“This is a perfect example of market maturity,” said Ms Jones. “Certain property fundamentals remain consistent and location is of primary importance.
“But property prices are no longer based on geographical location alone: now a property in Bur Dubai or Deira with immediate access to a metro station can command similar rates to a property in Jumeirah Lake Towers or Business Bay without metro access.”
Mehdi Agouzoul, a residential leasing consultant with another property company, Better Homes, also predicted rising rents.
“Based on what we saw when the Metro Red Line opened two years ago, we expect property values and rental rates for properties closest to the Green Line stations to increase by 5 to 15 per cent, depending on their proximity to the station,” he said.
Mr Agouzoul said tenants should check the rent increase conditions in their contracts and should contact the Real Estate Regulatory Agency (Rera) if there were a dispute, and property owners should seek the advice of an estate agency to avoid incorrectly pricing properties.
He said owners were free to set rental prices as they deemed fit, but only for properties that were empty. For occupied units, landlords and tenants might find themselves in disagreement over rent rises.
“Therefore, tenants should check their rental contract to see what it says,” Mr Agouzoul said. “If the landlord attempts to change the terms of the contract as far as increasing the rent is concerned, then Rera is there to decide.”
Abdelfattah Sattam, 46, from Egypt, manages a five-storey building with 15 apartments that is three minutes’ walk from Al Ras station, set to start running on Friday and to open to the public on Saturday.
Mr Sattam said he would charge new tenants an extra Dh4,000 a year.
“The two-bedroom apartments now rent for Dh32,000 a year,” he said. “But from now new tenants will have to pay Dh36,000 and they will pay it happily for the convenience of having the metro station here.
“Before my tenants had to take taxis or buses to Union station to catch the metro.”