Are Sharjah’s rent hikes easing? New Rental Index starts to cool renewal rates

Dubai: Apartment rents in Sharjah are set to stabilise in coming weeks after more than a year of sharp increases as the benefits of the emirate’s new Rental Index show up on new leases and renewals. Any slowdown in rental hikes will be more visible in renewals, industry sources say.

So far this year, a sizable number of Sharjah’s apartment rents had seen ‘increases of 18%-25%’ – even in older buildings that had completed major renovations or upgrades. If rent increases were to start slowing down, that would come end up as a major relief when leasing activity picks up again from September.

“With the Sharjah Rental Index in place (since January), rental increases are expected to moderate in the second-half of the year, particularly for renewals,” said Muhammad Ikhlaq, Betterhomes’ Sales and Leasing Manager at the Sharjah Office. ”The Sharjah rental market is expected to stabilise as landlords and tenants begin aligning more closely with the new index benchmarks.”

What has been impacting long-time residents was the sudden rental hikes they faced during renewals in the first-half of 2025. Landlords, especially those who invested in upgrading their buildings, benefited most from the new Rental Index taking effect.

Old vs. new building rentals

In older buildings with fairly good features, typical rents for 2-bedroom units are around Dh50,000 a year.

For newer, custom-built residential buildings, rents average around Dh70,000.

In new master-planned or community-based developments, 'especially those offering amenities and enhanced facilities, 2-bedroom units are commanding between Dh90,000 and Dh110,000 per year', said Ikhlaq.

The same trends were visible when Dubai brought out its ‘smart’ Rental Index early January, which allowed increases based on a building’s star rating system and other factors. But now, the pace of rent increases in Dubai is slowing down, based on multiple data that’s put out these days. Typical increases are averaging 5%-10%.

Sharjah’s new apartment buildings

According to Ikhlaq, new buildings ‘often located outside major master-planned communities typically enter the market at more competitive rentals’.

“However, they tend to lease quickly due to amenities and flexible terms. But rents for older high-rise buildings that have not been well-maintained are starting to stabilize. Tenants now have more options and are gravitating toward newer, better-managed developments.”

According to data from the proptech Rentify platform, new and upgraded residential buildings are able to get rental premiums of 12%-22% above older options.

The rental spread between new and less upgraded older buildings widens to ‘25%+ in high-demand corridors such as Al Khan, Al Majaz and Maryam Island’, said Rashed Hareb, co-founder and CEO of Rentify.

“The difference is being driven by higher build quality, parking availability, better common area maintenance and smart access.

“Older properties that have not undergone meaningful maintenance are competing primarily on asking rent and incentives, whether that’s ‘partial free rent’ and fee absorption.”