Muscat: Villas in Sharjah have emerged as the standout performer in the Emirate’s residential rental market in 2017, recording an 11.7 per cent rise in rents during the first six months of the year, according to international real-estate consultancy, Cluttons.
Cluttons’ Sharjah Property Market Snapshot for Summer 2017, showed that following growth in the first and second quarter, villa rents in Sharjah now stand at almost Dh112,000 per annum. This year’s growth signals the first rise in villa rents since late 2015 and can be considered a reflection of the growing awareness of the cost advantage offered by villas in Sharjah when compared to Dubai and Abu Dhabi, where average annual villa rates at the lower end of the price spectrum stand at roughly Dh140,000 to Dh150,000.
Suzanne Eveleigh, Cluttons’ Head of Sharjah said, “Demand for villas in Sharjah is likely to continue rising, fuelled by the relative affordability of homes, compared with those in Dubai, which in turn will remain a key catalyst behind the multitude of mixed use freehold projects bubbling through. We are already seeing a number of new villa projects coming to market that provide quality, affordability and accessibility, including communities by Majid Al Futtaim, GIBCA and Faisal Holding. We expect to see continued demand for these developments as they reach completion.”
Faisal Durrani, head of Research at Cluttons, added: “Sharjah’s position as an affordable alternative to Dubai continues to be retained. The Emirate’s emerging profile amongst the wider expat community, coupled with the strong focus on creating a family-friendly destination is boosting its appeal and this is reflected in the level of demand we are recording from tenants.”
In contrast to the villa market, apartment rents in Sharjah have maintained their downward trajectory, slipping by 7 per cent in the first half of 2017 after an 8.1 per cent decline in 2016.
Cluttons’ research shows that rents in Al Nahda, for instance, have lost the most ground when compared with other markets the consultancy monitors, decreasing by 10.9 per cent between January and June 2017. Interestingly, however, in this sub-market, the rate for one-bedroom flats has dropped by almost a fifth to stand at Dh38,000 per annum, while three-bedroom apartments (Dh70,000 per annum), were the only apartment type to register any growth across the areas being monitored.
“Apartment rents are expected to continue softening over the next six months, likely mirroring declines in Dubai of 5 per cent to 7 per cent as landlords move to remain competitive. The decrease in prices has kept tenants interested and thus kept the number of enquiries for apartments at a sustained level, despite a number of companies downsizing their staff requirements,” added Eveleigh.
In Sharjah’s office market, rents remain firm. Cluttons’ property market snapshot report indicated that the resilience of office rents in Al Soor and the prime and fringe areas of Al Majaz has taken hold this year, with rents remaining unchanged during the first six months of 2017.
Durrani commented, “The new resilience shown in Sharjah’s office rental market in 2017 is in direct contrast to last year, when office rents slipped by as much as 9.3 per cent in the prime areas of Al Majaz to AED68 per square foot, while Al Soor (AED60 per square foot) registered a slightly less severe correction of 7.7 per cent over the same period.
“While we have previously highlighted the small size of Sharjah’s Grade A office market, this has kept it relatively well insulated from more macro issues compounding global growth, and there remains little in the way of new demand streams aside from constant requirements from the public sector, which remains a key demand driver. In fact, the 2017-18 Government of Sharjah Budget aims to create 1,800 new jobs for Emiratis.”