Apartment rents in Sharjah and Ajman are feeling the pressure with the increasing number of new and affordable properties available in Dubai.
This is encouraging commuter-residents from Sharjah to relocate to their workplace of Dubai "despite waived deposit requirements, rent-free periods, increased number of payments [up to 12 cheques] and rent adjustments" offered by landlords in Sharjah, says real estate consultancy Asteco.
Asteco reckons that apartment rents in Sharjah softened by 4 per cent on quarter during each quarter of 2017.
"The continuous delivery of supply in Dubai will hinder the recovery of rental rates throughout the emirates, specifically in Sharjah and Ajman, due to their proximity," said John Stevens, managing director, Asteco.
But it was a good year for property sales in Sharjah, with a new generation of developers coming up with mixed-use, master-planned communities. Asteco reports that the value of real estate transactions in Sharjah grew by 37 per cent in Q3-17 compared with the same period in 2016.
There was increased spending on road and infrastructure projects. Asteco believes this will strengthen the industrial and tourism sector in particular, and create a favourable environment for employment and business growth, and investment.
There was substantial growth in tourism throughout the year. In response, Sharjah, Ras Al Khaimah (RAK) and Fujairah have announced additional hotel supply, with Sharjah aiming to attract 10 million visitors by 2021 and RAK projecting an increase of 11 per cent to 1 million tourists in 2018.
"With the increase in new project launches, ongoing construction activity and the implementation of diversification initiatives, the Northern Emirates, notably Sharjah, are aiming to achieve economic sustainability and become less dependent on real estate demand from Dubai in the medium- to long-term. However, in the short-term Dubai's real estate market sentiment will continue to affect rents and sales prices in the Northern Emirates," Asteco adds.
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