Dubai: After Dubai, it’s Sharjah’s turn to face residential rent price hike. The emirate has seen rentals go up 16 per cent on an average in the last 12 months, as revealed on Sunday in a report by Asteco Property Management.
“This rise is a direct result of the hiked rents across Dubai, which have sparked a reverse relocation trend, with budget-sensitive tenants seeking out more affordable accommodation in the next emirate,” John Stevens, Managing Director of Asteco, said in the report.
Mat Green, head of research in the UAE at CBRE Middle East, echoed Stevens’ view.
“What we are seeing now is occupiers looking at alternative locations, especially in the last 18 months. That’s having a knock-on effect on other markets, such as Sharjah,” he told Gulf News in a phone interview.
Rent rates for apartments in Sharjah’s popular commuter areas have increased between 16 per cent and 27 per cent since the second quarter of 2012, the report highlighted.
Al Nahda apartments attracted the most demand, with annual rents climbing 27 per cent in the second quarter of 2013 compared to the same period last year. A two-bedroom unit costs Dh40,000 as per the report.
Next in demand is Al Majaz, which registered a 24 per cent rise in rents, followed by Al Wahda, with a 22 per cent increase.
Also, villas saw rent rates jump 12 per cent for those located in Al Khan, Sharqan and Al Quz. According to the report, the rise is due to insufficient good quality stock and strong growth in the interest of tenants.
However, the report noted a discrepancy in rental increases in certain locations. For instance, Al Khan registered a 33 per cent rise year-on-year, while Sharqan and Al Quz recorded a two per cent increase for the corresponding period.
Meanwhile, the office rental market saw an average one per cent decrease year-on-year in rent rates as per Asteco estimates.
The consultancy says it’s a result of little interest in the office space from new companies in the northern emirates. But popular areas such as the Corniche, Mina Road and Al Wahda recorded increases of nine per cent, five per cent and four per cent respectively.
Stevens expects the short to mid-term outlook for the Sharjah property market to be positive,
“This sustained demand is being carefully monitored by the government as it looks at future economic stimuli, with infrastructure and construction project initiatives leading the agenda,” he said.
CBRE’s Green, meanwhile, expects rent hikes in Sharjah and other emirates close to Dubai to continue in the next 12 months.
“Over the coming 12 months, other locations that are more affordable will see more demand and that will increase rent rates,” he said.
Ajman, Ras Al Khaimah, Umm Al Quwain and Fujairah have recorded a year-on-year jump in rent rates of 10 per cent, eight per cent, two per cent and five per cent, respectively.