By Andy Sambidge
New Asteco report shows rents in Sharjah rise 7% in first quarter as Dubai residents seek out more affordable homes
Sharjah is benefiting from ongoing rental rate rises in Dubai as residents look to relocate to more affordable accommodation, according to a new report from Asteco.
Its Q1 2014 Northern Emirates report said on average the emirate recorded seven percent quarter-on-quarter growth for apartment rentals, and a year-on-year figure of 38 percent.
The report added that rates in the other Northern Emirates of Fujairah and Umm Al Quwain remained stable, with Ras Al Khaimah and Ajman showing marginal growth of two percent and three percent respectively in Q1.
“Budget-conscious Dubai residents are now relocating to Sharjah in a flight to affordability. A vastly improved road network and public transportation, has also benefited the northern emirate,” said John Stevens, managing director, Asteco.
Apartments in key residential areas such as Al Nahda, Mina and Al Wahda have seen average rental increases of 10-11 percent in the last three months and Asteco said it expects rental rates to continue on their upward trend through to the end of the year with no new supply due to come online.
“We are also seeing rental increases for Sharjah’s older apartment buildings, which grew by an average of 6 percent quarter-on-quarter, and this reinforces the attractiveness of the emirate to budget-conscious residents,” said Stevens.
Prospective tenants looking for ‘prime’ accommodation in Sharjah can expect to pay anywhere between AED27,000-AED50,000 for a one-bedroom apartment and AED32,000-AED80,000 for a two-bedroom unit
Rental prices in the Al Wahda neighbourhood are currently fetching up to AED50,000 and AED65,000 for a one and two-bedroom apartment respectively, with similar buildings located in the popular Corniche stretch commanding up to AED50,000 and AED80,000 respectively.
Asteco said prices are being boosted by a number of government-led tourism and leisure initiatives including development within the retail sector, notably the expansion of Sharjah City Center and other initiatives in Al Khan and Al Qasba.
A 7,000-square metre Roman-style amphitheatre also opened recently last March 2014 on nearby Majaz Island with a capacity for 4,500 people.
“Most importantly, we are seeing a complete upgrade of Sharjah’s transportation infrastructure, making the daily commute to Dubai easier and reducing traffic congestion within the emirate,” said Stevens.
Asteco added that Sharjah’s commercial sector has also seen leasing rate increases in several popular locations over the last quarter with the Corniche and Al Wuheidah Street recording growth of eight percent and five percent respectively despite continued sector stagnation with just two percent growth overall.