Cluttons in the UAE: “Residential rental market prices in Sharjah move back towards the peak of 2007.”
Cluttons, the real estate specialist which has enjoyed a dedicated Middle Eastern presence since 1976, reports a strengthening rental residential market in Sharjah. Landlords in the Emirate are once again benefiting from rising residential rents in Dubai and an influx of people who are being priced out of the Dubai market.
The recent launch of the Arenco Golden Sands Tower in the Al Nahda area of Sharjah, illustrates the strength of the rental market with prices from AED 41,000 for one bedroom units — prices which have not been seen in Sharjah for several years. Additionally, landlords are tightening their terms and are only prepared to accept a one cheque annual payment with a further 20 percent of the annual rent required as a security deposit.
Shane Breen; “Sharjah is viewed as the most suitable alternative to those finding themselves out-priced by rising rents in Dubai, and demand is outstripping supply for the first time since the global financial crisis. We also note landlords offering tight payment terms, in a move away from flexibility.” — Shane Breen, Associate Director, Sharjah Cluttons
Whilst this tower doesn’t necessarily set the market rate, it represents a significant shift in the market. The Arenco Golden Sands Tower is in a convenient location and offers a high standard of finishing and facilities, catering to current market demands. Other rental rates in the same location average at around AED 30,000 to 32,000 per year for a medium quality, one bedroom flat.
Demand is now outstripping supply in the Sharjah market as many new buildings were mothballed during the downturn, so available new stock is limited.
“Where previously investors have constructed new properties, we’re now witnessing greater demand for existing, income-generating properties which will reduce supply and cause rents to rise.” — Shane Breen
Government legislation is in place to help protect tenants from spiraling prices. Sharjah Municipality offers tenants a protection period of three years from the start of a new lease, with rates then moving to “market rate” on renewal of the fourth year. Cluttons envisages that this may result in an increase of disputes between tenants and landlords via the rental committee hearings within the Municipality.
As the economy in Dubai and Sharjah continue to improve, Cluttons expects to see the residential market strengthen and rents for both apartments and villas continuing to rise for the next six months.