Dubai: Villa rents in Sharjah do not seem to be following the script. In the fourth quarter of 2017, they actually gained a marginal 1.7 per cent, but that is still quite a contrast to the general decline in residential rents elsewhere in the UAE. And this year, they could put on another 1-2 per cent, according to Cluttons in its latest update.
In fact, apartment rents in Sharjah still remain under pressure, and are “likely to see corrections of 5-7 per cent this year”. If this pans out, it follows a 10.6 per cent rental correction all through 2017, with Abu Shagara topping the list of weakest performers, seeing rents down an average of 15.1 per cent during 2017.
“This market has been evolving ever since the used car showroom dealerships vacated the area at the end of 2015,” as per Cluttons reports.
The other neighbourhood to register double-digit declines was Al Qassimiya, which recorded a dip of 10.6 per cent.
The emirate’s existing landlords will also need to worry about what’s on the horizon — a raft of new freehold projects were launched last year and should start deliveries by late 2019-20.
But these landlords are also caught in a bind. They are “still reluctant to adjust advertised rents downwards due to concerns about alienating existing tenants. However, with tenants increasingly seeking out new buildings, reflecting household financial pressures stemming from the January 1 introduction of VAT, rising utility bills as subsidies continue to be phased out and rising inflation levels, we feel landlords will need to drop rents, particularly in older buildings, to sustain demand,” the report adds.
