Dubai: By year-end, Sharjah’s existing landlords will feel the squeeze on rents from either side. Both within Sharjah and along Dubai, new supply of homes could have a direct say in how landlords can price their rents.
Within Sharjah, some of the first handovers at recently launched freehold developments will become ready for occupancy. Some — or even a good many of these — could enter the rental market.
That being the case, rental rates in the Northern Emirates are “not likely to recover in 2018 due to increasing supply,” states the latest Asteco report. And this could well be the state into 2019, though much depends on the level of supply. In Dubai, new supply in the second-half of this year is expected to be around 10,000 plus, which is at the top end of the estimates. (In H1-18, Dubai saw around 5,000 new homes being completed.) Some of the mark downs in Sharjah rentals have already happened. Across the Northern Emirates, in the 12 months to end June, residential lease rates are down 11 per cent on average. The high-end properties in Ajman had the biggest dip, by 13 per cent, while those in Ras Al Khaimah was able to stem the decline to a manageable 7 per cent, according to Asteco.
In Sharjah, the Rolla and Corniche neighbourhoods saw rent demands scaled down by 13 per cent in the 12 months to the end of the second quarter. That meant a two-bedroom unit in the Corniche now goes for Dh28,000 to Dh55,000 and a three-bed for Dh45,000 to Dh75,000.
A studio unit at the Rolla could be rented for Dh13,000, similar to what a similar property type would fetch in the Al Butina area. The Al Nahda and Al Qasimiah locations have seen dips of 11 and 12 per cent, respectively, on a year-on-year basis.
Even at these rates, apartment rents in Sharjah are still 17 per cent higher than what they were in Q4-11. But from the market peak of first quarter of 2015, they have slipped below 20 per cent during the period. For landlords, much thus depends on how well they can manage competition from the new supply.
