Rents in Northern Emirates seen falling after 20% H1 drop

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RENTS FALLING: Residential lease rates fell by an average of 20% in HI in Sharjah, among other areas. (Getty Images)

Residential rents in the UAE’s Northern Emirates declined by 20 percent in the first half of the year and look set to keep falling in the second half, CB Richard Ellis (CBRE) has said.

Residential lease rates in Ajman, Ras Al Khaimah, Sharjah and Umm Al Quwain fell by an average of 20 percent in the first half, with some properties seeing drops of more than 35 percent, the commercial real estate consultancy said.

''With supply already well outstripping demand, tenants are likely to benefit from an increase in options while also being offered more favourable terms from landlords,'' CBRE said in the report.

Housing in the UAE’s Northern Emirates became popular with cost conscious occupiers during the second half of Dubai’s six-year property boom.

But as real estate prices have crashed, commuters are choosing to move back to Dubai at a time when supply in nearby emirates – particularly Ajman and Ras Al Khaimah – is rising sharply.

The Ajman government took an AED800m stake in the emirate’s beleaguered Marmooka City development in February this year in a bid to restore confidence in the project.

Similarly, the Ras Al Khaimah government has agreed to take over the AED2bn La Hoya Bay island property project.

Both emirates have formed regulatory bodies for the real estate sector modelled on Dubai’s RERA.

''It is feared that already declining market conditions for developers will worsen, at least in the short term and this could result in additional delays, cancellations or government intervention,'' CBRE said.

In May, the UAE government issued a decree granting foreigners the right to a six month renewable residency visa if they owned properties worth at least AED1m ($272,300).

The impact of the new regulations on the Ajman and Ras Al Khaimah property markets is not yet clear, but the value of most residential properties in Ajman is below AED1m, CBRE noted.

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READERS' COMMENTS

rent
Posted by santhakumar, abudhabi, indian on Tuesday 4 August 2009 at 12:19 UAE time


it is very happy to hear this news.but the people who stays in abudhabi it is very difficult.in musaffah they are asking 90000 for one bed room. how the middle clss can survive.

Thank You........
Posted by Charles David on Tuesday 4 August 2009 at 09:02 UAE time


Thank you to all that assisted me with my search (Mightie, Dubain). I pray for a favorable end result.

ARRA - Contact Details
Posted by Mightie, Dubai, United Arab Emirates on Monday 3 August 2009 at 17:10 UAE time


ARRA contact details:
Tel: +971 6 7444 144
Fax: +971 6 7444 145
Email: info@arra.ae
Web: www.arra.ae (under construction)
P.O.Box: 2333 Ajman

Office Address:
Al Ittihad Road, Old immigration Building,
B block, Ajman (same road as Lulu Hypermarket)

AJMAN RERA - ARRA Address
Posted by Dubian, Dubai, United Arab Emirates on Monday 3 August 2009 at 14:15 UAE time


Charles, Ajman equivalent of RERA is called ARRA and their website is www.ARRA.ae but unfortunately its under construction.

I am also looking for a way to reach them so if anyone could help. ARRA has issued a few statements lately linking payments to escrow accounts etc but the developers do not seem to follow it.

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