Dubai: Sharjah residential rents too are starting to show 10-25 per cent year-on-year increases, a lot of which would have happened in the first two months of 2023 as many tenants shifted to new units at higher lease rates. Even then, Sharjah rents still maintain a sizeable price gap compared to similar apartments and villas in Dubai.
A two-bedroom apartment in Al Majaz would average Dh35,000 a year (up 9.4 per cent year-on-year), while a one-bed in Al Share would be around Dh20,000, up by a whopping 20 per cent. A one-bed in Al Qassimiya would be Dh22,000 a year, an increase of 22.2 per cent, according to a new report from Savills.
Interestingly, the biggest increases have been noted in 1- and 2-bedroom apartments, and quite the contrast to what’s happening in Dubai, where bigger format homes have seen the bulk of the 15-35 per cent rental surge.
In Sharjah, property sources reckon that rents could be in for double-digit increases this year. “The emirate’s rental scene was slower to pick up, but it’s now running on some serious gains,” said a broker. “New buildings with higher rentals have raised the asking rates, and even some of the older buildings too are going for higher leases.”
One of the fastest emerging areas will be the University City/Al Muwaileh, which is where the developer Arada's massive Aljada project is based. Handover of homes in the initial phases of Aljada have hits stride, and there will be more of that this year. (A secondary market is also building up for Sharjah freehold properties.)
The area is seeing average two-bedroom rents at Dh35,000, a near 10 per cent increase from last year.
Will new freehold homes stabilise rent gains?
Sharjah’s freehold property market has been one of the stellar performers of recent years, more so since the final quarter of 2022, when the emirate widened the scope of freehold titles. More recently, Sharjah confirmed that government-owned land would be released to private developer-investors, and that too could see more freehold projects launched.
But it will be a gradual process, according to a top official at Savills. "Smaller private developers are exploring opportunities in the emirate - it’s unlikely we’ll see any large new developers enter the market in the short-term," said Shane Breen, who heads the Sharjah operations at the property firm."
We expect existing developers to continue their expansions and take advantage of their local experience.
On the offplan launch side, there have been niche launches, such as the one from ASAS Real Estate (the property arm of Sharjah Islamic Bank) in Khorfakkan.
"The Sharjah market is experiencing significant growth at the moment as it develops and matures," said Breen. "The rise of masterplanned developments has primarily driven this growth, resulting in record transaction volumes across the emirate."
Last year, overall transaction values were at $6.6 billion and January 2023 numbers on their own were 'already at 15 per cent of all of 2022'. "The growing number of projects across Sharjah means that it can now cater to an expanding client base," added Breen.
The number of sales transactions amounted to 640 transactions, or 29 per cent of the total number of transactions, and the number of mortgage transactions reached 295 transactions, which is 13.4 per cent of the total transactions, with a total value of Dh385 million. While the remaining transactions of amounted to 1,272 transactions, which is 57.6 per cent of the total transactions.