Doha: The Doha Metro project will further boost the country’s real estate sector. The areas closer to the metro stations are likely to benefit the most from the project as they are expected to attract new real estate projects.
“One of the significant impacts of rail transit projects is the impact on the real estate market. Numerous accounts of recent experiences with the impact of rail transit on property values have surfaced within the past two decades regionally and internationally. Proximity to the metro system in Qatar may potentially become a trigger for real estate activity and development,” Pawel Banach, General Manager, leading consulting firm ValuStrat told The Peninsula.
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The partial operations of Doha Metro Red Line was launched last Wednesday with trains running between Al Qassar in the north to Al Wakrah in the south. The full opening of the network is expected by 2020. Past experiences in other countries have showed that properties located near metro stations have commanded premium compared to properties far from stations.
“Although there are many factors which impact the value of a property such as location, quality, amenities etc; nearness of the property to the metro system can become a value deciding factor,” he said.
“In Singapore, properties located five minutes away from a rail station tended to attract more demand and received a premium of 10 to 15 percent in price compared to properties located further away,” Banach explained. Doha Metro has become a big hit among residents as more than 86,000 people used the trains in the first two days after its launch.
The areas near stations are expected an increase in construction activity and launch of new real estate projects. Going forward, in order to balance the rising cost of living, potential home renters may increasingly demand for property located near metro stations.
“Once the metro becomes fully operational, areas that have been poorly connected or are in a secondary location such as Lusail and Al Wakrah will have the potential to help deliver a wider range of real estate projects. These neighbourhoods are expected to benefit and have the potential to outperform the wider market over the longer term” Pawel Banach said.
Another potential impact of the Doha Metro on real estate is the expected long-term increase in supply along metro routes. Regionally it has been observed, that routes along the existing and potential rail transit system become popular for future real estate developments and attractive for investors.
He also added that rental rates and absorption of buildings in close proximity to metro stations are also expected to grow especially in areas which are secondary. “There is a range of factors which may potentially drive this trend, one of the most important being affordability. Over 50 percent of the households in Qatar are middle-income, therefore rents in this segment have performed comparatively better than others,” he added.
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