Dubai: Despite power cuts and petrol shortages, rents in some areas of Sharjah have risen 2 per cent in the last quarter, real estate firm Asteco said.
The firm said the current rent for a studio in the Al Khan and Corniche areas has climbed to Dh20,000 to Dh25,000 a year, and office rents have risen by as much as 5 per cent.
Asteco reported that residents continue to move to Dubai, with many prepared to pay the premium to upgrade their accommodation and move to properties closer to their places of work and schools.
Craig Plumb, head of research at Jones Lang LaSalle Mena, said that the Sharjah market was experiencing "selective stability".
"Some portions of the market are now seeing prices stabilise or even increase marginally, but these sectors are relatively limited and confined to a few select locations.
"The average price and rent across the whole market has continued to decline and is likely to decline further for the rest of 2011."
He added that the Dubai market continues to exert downward pressure on rentals and prices in Sharjah and the northern emirates.
"With high levels of new supply expected in Dubai over the second half of 2011, prices and rentals in most locations in Dubai will fall further during the rest of the year.
"Prices have increased in certain high end [areas] in Dubai in the second quarter, but these increases have been limited to a few select high end projects such as the Palm Jumeirah and Arabian Ranches."
"Those locations which are attracting people from Sharjah and the northern emirates — for example International City, Silicon Oasis and Mirdif — are still experiencing declines in prices.
This will attract more demand back into Dubai as more families can afford to relocate to be closer to workplaces, schools and other facilities."
Plumb added that the levels of commuting into Dubai from the northern emirates will decline as a result of the improved affordability of apartments in Dubai.
"It must be remembered that a significant proportion of this market is extremely price sensitive, and many residents may choose to benefit from reductions in rentals in Sharjah and the other northern emirates, rather than deciding to relocate. For this reason, a continued daily inflow of commuters into Dubai can be expected."
Ali Hamoudi, a UAE-based economic expert, told Gulf News that tenants should be pushing their landlords for cheaper rents given the current property market.
"The real estate market is not controlled by sentiment as it was in 2007. It is now controlled by normal factors. And since the supply is far higher than demand, the tenant has the power of negotiation," he said.
Commenting on the rising rents in some areas of Sharjah, he said: "I do believe that this 2 per cent rental increase is tentative and includes some people who preferred to pay[than move out]."
The Asteco report found that Ajman apartment rents fell again, driven by low demand and strong supply, with average one-bedroom rates on Shaikh Hamid Road and Corniche Road down by 4 per cent.
Movement is also seen with some developers of ongoing projects approaching those whose developments have stalled and asking investors to transfer.
Fujairah, Umm Al Quwain and Ras Al Kaimah remained stable over the last three months, with no change in apartment rents in most areas.
tagsUnited Arab Emirates
yesterday i found an ad book showing one day offer (one bedroom for Dh22,000 in International city. So how could Sharjah rent go high by 2 per cent?
Sulaiman18 July 2011 17:26jump to comments