Dubai: Rental gains across Sharjah and the northern emirates took a breather of sorts in the first three months of the year — apartment leases were up by ‘only’ 7 per cent compared with the final quarter of 2013. That still counts for something as on a year-on-year basis rents were up by a steep 38 per cent.
According to an overview of the property market’s showing by Asteco, the older apartment buildings in Sharjah were able to hike their rates by 6 per cent in Q1, while those at the newer units gained 7 per cent.
In Fujairah and Umm Al Quwain, apartment rents were more or less stable, while marginal increases — of 2 and 3 per cent — were recorded in Ras Al Khaimah and Ajman.
“The pressure on residential rentals in Sharjah and Ajman have been brought on, to a good extent, by people shifting from Dubai in search of more affordable locations,” said John Stevens, managing director at Asteco Property Management. “Vacancy levels in Ajman have dropped way below 15 per cent even in neighbourhoods farthest away from Dubai.”
But if there is going to be no let-up in the migration of former Dubai-based tenants to Sharjah and the northern emirates, it could mean that rentals could yet see another round of spikes later in the year.
“Already areas such as Al Nahda, Mina and Al Wahda have seen average rental increases ranging from 10 to 11 per cent since Q4 2013,” the report said. “We anticipate rental rates will continue their upward trend throughout the year, especially since no major additional supply is expected.”
Infrastructure upgrades could also speed up the process. “Works on improving the road network and public transportation services are under way, which will improve the connectivity between the rest of the emirates and develop Sharjah as a principal residential destination,” said the Asteco report. “Roadworks at the fifth industrial interchange [National Paints Bridge] is one example of the expansion plan being carried out on Mohammad Bin Zayed Road in Sharjah, which was recently completed and open to traffic.”