Hyperloop and its Impact on Dubai Real Estate

The term Hyperloop was coined by Elon Musk, founder of Tesla & SpaceX, back in 2012. And ever since, it has become one of the hottest topics for research and discussion amongst scientists and science enthusiasts across the globe. Countries like France, Russia, Germany, the US, the UK and India are in a bid to establish this advanced transportation system. Fortunately, with so many countries in the run to build a Hyperloop system for their lands, Abu Dhabi is about to become the first state in the world to successfully achieve the target.

Though the term ‘Hyperloop’ is relatively new, the concept has been a part of popular culture for decades. The 1976 book “Tunnel Through the Deeps” discusses this topic in detail. Also, the vehicle used in the 1973 movie “Genesis II” to instantly transport people from place to another, the ‘subshuttle’, has portrayed as working on a concept similar to the Hyperloop.

In simple terms, Hyperloop is kind of a tube train that can travel up to speeds unheard of. The one which is scheduled to start functioning between Abu Dhabi and Dubai sometime around 2021, will have an approximate speed of over 1200kms/hr. That’s almost the speed of a fighter jet! This means that travel time between Abu Dhabi and Dubai, which is currently 1.5-2 hours, which causes serious headaches in traffic at times, will be reduced to a mere 12 minutes. Technology always finds a way to blow our minds, doesn’t it?

So what shall the effects of this insanely fast transport system on the real estate of these two world-class cities? Let’s find out:

Current Real Estate Scenario in Dubai and Abu Dhabi

Currently, Dubai is the 20th most expensive city in the world and Abu Dhabi is not so far at the 23rd position. On the contrary, property rates in Dubai and Abu Dhabi have been dipping down year over year, quarter over quarter. Many media agencies like Arabian Business and Khaleej Times have been reporting on the real estate decline in the past couple of years. However, according to an article by Arabian Business has quoted a New Bayut report suggesting that the rate at which the real estate prices where decline is slowing down. This is an indicator of stable prices in the near future. Nonetheless, the property rates are projected to fall over the next 12 months.

Enter – The Hyperloop Project

The Hyperloop project is being built by Hyperloop Transportation Technologies (HTT). When complete, the project will be functional between Abu Dhabi and Dubai, reducing the travel time to 12 minutes! This is bound to impact a lot of sectors and real estate will not be an exception. Following are certain ways in which the Hyperloop transportation will boost the real estate sector:

Increase in Business and Trade

As the distances are virtually shortened, trade and business between Dubai and Abu Dhabi are bound to increase. Small and medium businesses functioning in Abu Dhabi will get a viable option to find business opportunities in Dubai and some will surely end up setting branches in Dubai for expansion. And the business grows and expands, demand for real estate will surely increase.

Increase in the supply of capital and workforce

Due to reduced travel time, expats from both the Emirates will be tempted to find career growth prospects present across these two cities. Abu Dhabi will also benefit as the big investors of Dubai shall surely review Abu Dhabi as the land of investment potentials. With the daily commute barrier taken out of the game, investments for building trade & corporate centres are likely to rise in the two cities. Also, as new trade and commerce centre is established, newer opportunities for expats are likely to be created, further increasing the demand for residential property. With the government working on more liberal foreign investment policies, Dubai is about to witness even more expansion of industries and corporate buildings, and the Hyperloop connectivity will perfectly complement the demand for the workforce that is bound to rise in the near future.

Rise in tourism

The Hyperloop transport system has become a worldwide phenomenon. People from even the developed countries like the USA and the UK are eagerly waiting for the Hyperloop to hit their shores. Presently, it seems that it is a long time before any other country in the world is able to complete or even start, in some cases like India, Hyperloop projects. In fact, only a handful of countries on God’s green earth are actually working on this. This gives Abu Dhabi and Dubai an added advantage. Foreign tourism for Abu Dhabi will be affected positively as the tourists who visit Dubai will surely be tempted to experience the Hyperloop transport system. Therefore, the rates of the properties near the Hyperloop stations will be skyrocketed.

All these factors give a strong indication about what the future has to offer with the emergence of Hyperloop technology. Abu Dhabi will have the first running Hyperloop in the UAE and without a shadow of a doubt, the UAE will have a few more of these in the near distant future. Therefore it can safely be concluded that though the current real estate rates are dipping, this is probably the best time to invest land assets, especially in Dubai and Abu Dhabi. With futuristic technologies like the Hyperloop, coming years are bound to be spectators for the multifold increase in real estate, for both, rental and purchase.