By Staff writer
New Asteco report says cities in northern emirates are being favoured for relocation as costs rise in Dubai
Demand for affordable housing continued to attract new arrivals principally from Dubai to Sharjah and Ajman in the second quarter of 2014, according to a new report by Asteco.
Its Northern Emirates market report also highlighted a slowdown in residential rental growth rates as the supply and demand dynamic underwent a geographic shift.
The emirate of Sharjah recorded three percent quarter-on-quarter growth for apartment rentals with year-on-year growth dropping to 31 percent from 38 percent.
Annual rates in the other Northern Emirates of Fujairah, Umm Al Quwain and Ras Al Khaimah remained stable with nominal increases of two percent and one percent respectively.
However, Ajman registered a seven percent increase in Q2, Asteco added.
John Stevens, managing director, Asteco, said: “Ajman is now taking over the mantle as the relocation destination for budget-conscious residents as landlords in Sharjah ask higher than average rental rates, particularly for brand new buildings in popular locations like Al Nahda, Corniche and Al Wahda.
"However, this eagerness to capitalise on market opportunity is not being matched by transaction volume, confirming that budget issues are still a key driver.
“Sharjah in particular has benefited in recent months due to aggressive rental rate increases in neighbouring Dubai, but this quarter saw a degree of stabilisation in Dubai’s more affordable communities, which led to a reduction in the number of residents choosing to relocate.”
The overall positive market sentiment at the start of 2014 has also seen the reprisal of a number of stalled residential projects and launch of several new projects in the Northern Emirates, which Asteco said it expects to boost current stock in the next few years.
“This surge in the development pipeline in the Northern Emirates is a positive reflection on the future prospects of the UAE real estate sector as a whole. We are seeing investor confidence return as the country pushes ahead with the next wave of infrastructure projects that will create opportunities to build new communities supported by the requisite access, facilities and services that long term residents would expect,” said Stevens.
Demand for office space in Q2 remained flat with Sharjah’s commercial sector experiencing an extended period of stagnation and no movement in rental rates quarter on quarter.For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.