Sharjah Rents Up Around 18% In Q3 As Dubai’s Rental Growth Slows

Rental rates across Sharjah grew two per cent quarter-on-quarter during Q3 2014, in line with a slowdown in Dubai’s property market, according to a report by property consultant Asteco.

The Q3 increase was slightly higher on a year-on-year basis where the rents for high-end properties rose 19 per cent in Sharjah while other properties registered a 18 per cent rise.

Rental prices in areas such as Al Qasimiah, Abu Shagara and the Corniche recorded an above average growth of eight per cent quarter-on-quarter in Q3 2014. One and two-bedroom units in these three areas are currently priced from Dhs40,000 to Dhs55,000; Dhs40,000 to Dhs50, 000; and Dhs50, 000 to Dhs80,000 respectively.

“Real estate market values in Sharjah and the other northern emirates are largely dictated by what is happening in neighbouring Dubai, and with rental rates in some of its more affordable communities softening further still in Q3, this inevitably has a ripple effect across the northern emirates,” said John Stevens, managing director, Asteco.

“This is an indicator therefore that rental rates in the northern emirates could be reaching their peak, with the distinct possibility of a slowdown or even reversal in the number of relocations in the medium term as residents opt to return to Dubai to avoid battling the daily commuter grind.”

However, the rate of rental increase across other northern emirates was higher than the figures recorded in Sharjah, the report said.

Rents rose quarter-on-quarter by five per cent in Ras Al Khaimah, four per cent in Ajman and almost six per cent in Umm Al Quwain.

“This proves that uber budget-conscious residents are still willing to trade emirates and location convenience for cheaper alternatives that offer potential rental savings that are up to two or three times lower than equivalent units in Dubai’s most affordable communities,” said Stevens.

The report also noted that a number of projects in Ajman such as Ajman Pearl that were on hold previously have resumed construction while new megaprojects have been launched, in turn fuelling demand in the emirate.

“Another boost for Ajman and a project that is certain to raise its profile, is the Al Zorah master plan project from Lebanon’s Solidère Group,” said Stevens.

“This development is now under construction and with its high-end luxury positioning will add a new dimension to the emirate’s existing real estate landscape, targeting regional and international buyers.”

The 5.4-million square metre development will feature luxury villas, resort hotels, serviced apartments and apartment complexes in a landscaped and golfing environment surrounding the Ajman waterfront and mangroves.

In addition to these real estate developments, the Ajman government is also investing heavily in ramping up its infrastructure as it allocated 40 per cent of its fiscal budget to new developments.

These include a new airport project located in the Al Manama district, along with work in progress on seaports as part of Ajman’s 2021 strategy, Asteco said.