Owning a property in Sharjah is no longer impossible for all expats. The government opened up its real estate market in November, allowing potential buyers of any nationality to invest in the emirate. The first developer to have taken advantage of this decision is that of Sharjah-based group Tilal Properties. Its latest project, Tilal City, is a 25-million-square-foot mixed-use development, with the first plots expected to be handed over next year.
Demand is looking good so far for the Dh2-billion community. Consisting of five separate zones with 1,880 plots of land, Tilal City will offer accommodation for approximately 65,000 residents. And according to the developer, plots are selling fast.
So how is this going to impact the UAE property market overall? According to real estate and property experts, allowing the country’s other 214 nationalities the right to buy will only improve things for the better.
“Sharjah’s new property laws are having a positive effect on the UAE market by offering an opportunity to buy in an area that hasn’t been catered for until now,” Victoria Garrett, Associate Partner — UAE Residential at Knight Frank, tells GN Focus.
“Dubai and Abu Dhabi do not really offer what you would call affordable housing, which is usually targeted at teachers, nurses and civil servants.
“The opportunity to buy at that level of the market is great for people looking to be based in the UAE for the medium-to-long term, those who would like to have some roots here, but previously haven’t been able to afford to get on the property ladder.”
Adham Saleh, Managing Director, eZayed Real Estate, agrees, saying: “This will be beneficial to Sharjah, as it will help retain mid-income earners who are currently living in the emirate, and want to continue living there.
“The factor fuelling the demand for real estate in the city is, predominantly, the high rents in neighbouring Dubai. Plus, many expats receive a housing allowance and would rather use that money to invest in a property, as opposed to just spending it on rent.”
Impact on rents
Opening Sharjah’s property market to foreigners is not only great for mid-income earners but also for those looking to continue renting in the emirate or even Dubai.
Suzanne Eveleigh, Director of Property Management at Cluttons Middle East, explains: “If you look at our Sharjah report, rents on apartments have risen by 25 per cent over the past year. But that’s because of the demand.
“The rental side of the business and sales are driven by demand and lack of supply. And in Sharjah there’s a huge lack of supply.”
She continues: “To be able to purchase something as an expat in Sharjah is fantastic. You have a lot of people who have businesses here, or have been here since the 1970s, but haven’t had the opportunity to buy something. Affordable housing results in more economical rents as well.”
Eveleigh predicts that even though a rent cap system doesn’t exist in Sharjah at present, prices will automatically regulate once more developments become available.
“Although there is no rent cap at the moment, the market will soon regulate itself. I hear there are plans to introduce regulations to cap rents across the emirate.”
What buyers can expect
Tilal City’s five zones comprise commercial, office and retail areas, as well as residential apartments and villas. Haysam Jazairi, Business Development Executive Director, Tilal Properties, tells GN Focus this type of mixed-use development is the first of its kind in the emirate.
“We looked at Sharjah as a whole and realised that the emirate comprises lots of individual buildings, but there are no communities as such,” he says. “So we wanted to introduce something of the kind with a high-end specification. Additionally, we wanted to open up opportunities to the smaller investor — the small owner. It’s important to have something for everyone.”
Being able to cater to the smaller investor is key to opening up the UAE market as, until now, very few options are available for mid-income buyers. So how much will an investment in Sharjah set you back?
“Residential plots range from Dh110-Dh302 per square foot. It’s subject to the area,”
Jazairi explains.
“Sizes start from 5,000 square feet to a maximum of 14,000. Our terms of payment are very attractive, and investors have time to pay right up to the time we deliver the land.
“The response of the buyers has been very positive because even the regular employee is finding that they are able to afford it.”
Right time to buy?
While the prospect of investing in a property in Sharjah is certainly very attractive, down payment percentages still remain a concern for the average resident.
Jasmine Pereira, a health, safety and environment consultant who has been living in Sharjah for the past 22 years, says while it’s a good decision by the government to open up real estate, affordability remains a concern.
“It is a good move in the right direction for the government to allow expats to own property in Sharjah, as it’s a developed emirate with abundant land and resources available for use,” she says. “Its close proximity to Dubai has always been a keen factor for many who decide to reside in Sharjah as their preferred choice.
“However, personally, I would prefer to rent in Sharjah to owning a property, mainly due to the affordability aspect and considering my long-term plans. I just hope that this move doesn’t result in an increase in rents as Sharjah is a haven for residents who want to save money.”
Nada Nouh, a marketing operations supervisor, who has lived in Sharjah for the majority of her life, agrees.
“I work in Dubai and live in Sharjah, which will always have an advantage when it comes to rental rates, as it will always be cheaper than Dubai,” she says. “I am not sure whether I would buy in the emirate, though.”
The real estate experts we spoke to all agree that it is worth investing in Sharjah if you plan on continuing to live there for at least five more years. This will result in excellent returns on rents in the long term.
There is a downside, though. Leasehold property is not usually as good for long-term value appreciation compared to freehold. Furthermore, various local news reports have speculated that only those with valid Sharjah residency visas will be able to purchase property at present. This, of course, alienates those working in Dubai — even though they may already be living in Sharjah. However, Tilal Properties has denied this, stating that there is no such visa restriction. The buyer does, however, require a valid UAE residency.
However, all in all, the benefits far outweigh the cons, says Saleh. “This will really help the diversification of Sharjah’s economy as a whole,” he explains. “The emirate is already strong in the education and health-care sectors, so this new initiative will attract more investment, allowing further growth and attracting more business and companies to set up in Sharjah.
“In terms of the overall impact, this is definitely a positive move for the UAE, as it will help further stabilise the country’s real estate market. And more investment and business opportunities [opening] up in Sharjah is, of course, beneficial to the entire country.”
