Dubai: Residents in Sharjah are still getting a rental break, with residential lease rates over the last 12 months up by only 2-4 per cent on average.
And most of the rent gains have been for newly delivered homes, with landlords using that USP to ask for more. But then again, not by much.
There’s more of the new stuff coming in, with around 600 apartments at The Boulevard in Aljada getting ready for occupation. While end-users could still occupy many of these units, the ones put up for rent could fetch between Dh35,000-Dh40,000 for one-beds and Dh70,000-Dh75,000 on two beds. (Aljada typically commands a 15-20 per cent rental premium. It is located in the University City area.)
“New project completions have been keeping Sharjah rental rates steady even with all the action of 20-30 per cent rises in Dubai,” said an estate agent. “But second-half 2023 could see sharper increases, or at least have landlords no longer giving away too many incentives.”
Property market sources point to the population numbers released this week, with Sharjah recording a 20 per cent increase in recent years to total a 1.6 million resident base. The numbers also reflect the steady rise in end-users moving into their freehold homes at some of the emirate’s biggest real estate developments. (Sharjah announced granting of freehold titles to all nationalities last year and also has plans to free up more investment zones for new property.)
In the first three months, Sharjah landlords with older properties are not having to wait long for their units to find new tenants. This is where the increased resident base is starting to show up strongly.
“Rents on older buildings in Sharjah have not been rising – but they are no longer remaining vacant either,” said the estate agent. “Many landlords are upgrading older properties/buildings because they can see the opportunity gains from doing so. Plus, they have to upgrade to remain competitive against the steady flow of new projects.”
How have Sharjah rentals fared?
The property services firm Asteco recently issued an update on rental trends in the emirate, which finds most neighbourhoods have seen increased at around 2-4 per cent.
The Al Wahda Street rents have seen the highest relative increase, at 8 per cent in the 12 months ending March. Incidentally, Sharjah’s Al Nahda area leases remained unchanged during the period, Asteco finds. (In comparison, on the Dubai side, the Al Nahda neighbourhood saw in gains of 10-15 per cent.)
The popular Corniche district in Sharjah currently has two-bedrooms fetching Dh26,000-Dh45,000 from a 4 per cent rise, while Al Khan’s would be Dh26,000-Dh50,000 after a 6 per cent increase in the 12-month phase.
One area that is picking up is that in and around City Centre Al Zahia, where two-bedrooms in newer buildings are inching closer to Dh50,000 on a 1-year lease.
“The best part for landlords is that there are no more of the rent declines, with older buildings suffering the most during 2020-21,” said the head of a property management firm.
If more properties are assigned for short-stays, that could alter the rental dynamics in the emirate, reducing the number of units in the long-term leases.
"Sharjah's short-stay market is a work in progress," said the head of a property firm. "Unless there is sudden demand for short-stay options in the emirate, landlords will prefer the 1-year lease."