Dubai is a global leader in real estate, with innovation, long-term planning, and top-notch infrastructure as the main drivers of its growth. In addition to highways and metro lines, the development of waterfronts and new commercial developments are some examples of how infrastructure has an impact on property value in the emirate.
Investors who want to benefit from these developments should look at how new infrastructure will affect property prices before the rest of the real estate market catches on.
Why Infrastructure Matters in Real Estate
Infrastructure is one of the major factors that affect the demand for and value of property. Improved transport options, accessibility, public facilities, and commercial developments all make an area more attractive to residents and businesses.
The announcement of an infrastructure project will generally increase the demand for surrounding properties, thereby leading to higher property prices, with greater rental yield rates.
How Infrastructure Projects Influence Property Prices
Improved Connectivity
Location is a critical factor when it comes to buying or renting property. Buyers and tenants are more likely to purchase or rent property in areas where there are convenient transport links, such as with metro stations, major roads, and public transport.
The addition of new transport lines (e.g., metro expansions) and improvements to road networks will help reduce travel times for residents of these areas, making the surrounding communities far more attractive for families and other individuals.
Increased Demand from Residents
As new medical and educational establishments, community shopping facilities, recreational facilities, and parks become available these amenities result in improving the quality of life for residents living in a community and therefore, many families and/or professionals will choose to relocate into the area causing increased demand for residential properties.
Business and Employment Growth
Commercial districts, free zones, and business hubs provide jobs creating a workforce that continues to grow. As the number of jobs increase, the need for housing increases, thus contributing to the capital appreciation of real estate and rental income in a community.
Long-Term Capital Appreciation
Properties located near large-scale infrastructure projects tend to achieve greater long-term capital appreciation than properties located in areas that are less developed. When an investor enters an area before significant development occurs they will usually see large capital appreciation as the project nears completion.
Key Infrastructure Developments Shaping Dubai’s Property Market
Metro Network Expansion
Dubai is building a public transport infrastructure which will continue to make it possible for easier access to key residential and commercial areas within the city.
Metro Stations will create more demand for residential properties in the vicinity as residents use this form of transport to travel to and from work, which will significantly reduce their commuting costs.
Road and Highway Enhancements
Continuous improvements to Dubai’s road infrastructure help alleviate traffic congestion, improve access to communities, and reduce travel times.
Better access to new housing developments will be attractive to both investors and home buyers.
New Residential and Mixed-Use Communities
Ongoing construction of large-scale planned developments is transforming Dubai’s urban landscape with new living, retail, and entertainment options.
These developments will provide new investment opportunities and support ongoing demand for residential properties.
Tourism and Lifestyle Destinations
As a leading global tourist destination, the investment in tourism infrastructure and waterfront lifestyle and entertainment areas will continue to make Dubai an attractive place to live, and ultimately provide long-term growth in real estate.
The areas surrounding these types of developments will continue to benefit from an increase in visitor numbers and will support the rental market.
Emerging Areas Investors Should Watch
People trying to invest in high-performance investment properties should take a close look at those cities and communities that are benefiting from new infrastructure projects being developed now or in the near future. Signs of growth opportunities include:
- Future metro or transportation links.
- New commercial buildings.
- New planned schools and healthcare facilities.
- Government funded development initiatives.
- Increased population/tenant demand for rentals.
If you invest early in these areas rather than in established communities, you may be able to derive a higher return on your investment than if you had waited until after they were already established.
Tips for Property Investors
Things to do before you invest in these communities include:
- Researching what is out there (future developments).
- Check out what infrastructure will be available via government projects, and then see if you can find any of these developments in growth corridors.
- Look for properties that have excellent access to public transportation. The better the access, the more tenants and buyers you will have.
- Be prepared to hold on to your investment until the infrastructure project(s) are completed, which can take several years before you will see the full benefits from the impact of the investments, so you need to be patient.
- Use local professionals who have expert insight into the areas likely to benefit most from these future infrastructure investments.
Final Thoughts
Dubai’s booming real estate market is driven in large part by new infrastructure development. Each new public transportation system, commercial centre, lifestyle destination, and community facility provides an opportunity for investors who are interested in making a long-term return on investment.
Investors can make smart choices about where to invest in real estate by understanding how infrastructure investment will affect property values.
Need Expert Property Investment Advice?
At Tashirz Real Estate LLC, we help our investors find new opportunities in Dubai’s fast growing property market. From off-plan properties to rental properties and long-term capital appreciation, we guide our investors throughout the process.
Contact us today to explore some of the best places in Dubai to invest.
