By Andy Sambidge
Sharjah sees largest declines while Fujairah is least impacted by real estate downturn.
Rental rates for apartments in the Northern Emirates fell by up to 26 percent in 2009, but the rate of decline slowed in the last quarter, a new report published on Monday showed.
Fujairah was the least affected of the five Northern Emirates with an average fall of 10 percent while Sharjah saw the highest decline of 26 percent, property services company Asteco said.
Office space in the region saw average declines of 41 percent, the company added in its fourth quarter report on the Northern Emirates.
Since the first quarter of 2009, rental rates in Umm Al Quwain declined by 15 percent while rates in Ras Al Khaimah and Ajman fell by 17 percent and 25 percent respectively, the report added.
Compared to Q3 2009, the decline in rental rates in the final quarter of 2009 for Sharjah apartments slowed considerably with a quarter-on-quarter fall of fiver percent.
There were also minimal changes in the last quarter for villa rents, with no change for three and four-bedroom villas although five-bedroom units decreased by just 4 percent.
“Smaller units have shown signs of increased interest due to demand from young families and a lower price point,” the report added.
“Villa developments currently under construction in the neighbouring emirates are likely to have a downward effect on rental rates once they are completed,” said Asteco.
In Fujairah, studios are available for an average of AED19,500 whereas one, two and three bedroom units cost AED24,000, AED30,000 and AED45,000 per annum respectively - the same level as the previous quarter.
Sharjah remains the most expensive of the Northern Emirates with average rents of AED21,000, AED30,500, AED39,000 and AED50,500 for studios, one, two and three bedroom apartments.
For the same size properties, Ras Al Khaimah rental rates average AED21,000, AED28,000, AED34,000 and AED47,500 per annum; Ajman AED20,000, AED28,000, AED32,500 and AED47,000; with Umm Al Quwain the most affordable with average rental rates of AED15,500, AED20,500, AED29,000 and AED39,500.
The report showed that Sharjah office rental rates saw an average decrease of 9 percent from quarter three to quarter four 2009.
“Overall, the average percentage change for office space was minus 41 percent since the beginning of 2009 and is expected to further decline until the economy recovers,” the report said.
I think greedy landlords can now accomodate their relatives(or even move in themselves) very peacefully in many of their flats across the country. This was the most ridiculous excuse used by some landlords/agents to vaccate people from flats in order to collect higher rents from new tenants. Some of these people have lived a long time in these buildings and have had to vaccate leaving behind their sentiments. There are still some greedy ones out there who cannot yet digest the fact that the real estate has crashed and their empty flats will remain empty forever if they are not ready to come down to reality on planet earth and reduce the rents & become more tenant friendly this time around. I know a building which has about 20 flats empty but the agent is just not willing to reduce the price to anywhere near what is reported above(he asks for a 85K for 3 bedrrom without any facilties in Sharjah). Isnt it high time his alarm went off and woke him up? Gone are the days of squeezing tenants. Now we hear 6 cheques(some even monthly pymts), free rentals for 1 month, free maintenance, free car parking, etc etc.. Many of the big & good real estate agents have already adjusted the prices & ATTITUDES and have picked up the tenants who are looking for better bargains now. The proud ones will definitely lose out as they will have lost of income lost from not reducing their prices.. Some good breathing space in these times of job losses, salary cuts, etc
There are still some very stubborn landlords out there and some seem to get more stubborn in the crisis: I have less in the pocket, so I need to take more from the tennants. They will learn it the hard way, the market will teach them sooner or later. Short term greed never wins.
I had a couple of Apartments in Ajman. The property price and the rents both have fallen by 50% since Sep-08. I sold one back in Sep-09. I have no idea why the guy bought it, cause the prices are still coming down.