Dubai: Sharjah’s residents are getting an extended respite — home rents have dropped for a second year running brought on by what is happening in Dubai and a surfeit of new supply being delivered in Sharjah itself.
“Weaker job growth and the loss of tenants to Dubai has led to rising vacancy rates,” says a new report from Cluttons.
“With rates in Dubai down 8 per cent on this time last year, Sharjah’s landlords have been left with no choice but to lower rents in order to remain competitive.
“There has also been a marked decline in overall tenant requirements as tenants find themselves in the unique position of being spoilt for choice.”
7.1% drop in 2016
In the year to date, Sharjah home rentals are down 7.1 per cent.
Even then, this is still 30 per cent up on what they used to be at the beginning of 2012. Until the recent correction, Sharjah’s residential rents had gone through the proverbial roof.
But these days it is a completely different dynamic - “Our expectation for a 10 per cent drop in average rents this year appears on track,” said Faisal Durrani, Head of Research at Cluttons. “While Dubai should see a reversal in the fortunes of its residential markets in autumn next year, any subsequent improvement in Sharjah, as has been the case historically, is likely to arrive shortly thereafter.
“Until we arrive at that tipping point, rents in Sharjah are likely to continue ebbing, with a further 5-7 per cent fall next year before things stabilise.”
Sharjah is also facing stiff competition from Ajman. “Rents in Ajman are even lower with buildings of equally good quality and similar facility offerings,” said Suzanne Eveleigh, Property Management Director at Cluttons. “The key to winning back those who have migrated to the more affordable options in Ajman would be through offering flexible payment plans, in addition to better packages.”
