By Staff writer
Cluttons says this is the first time in over two years that average annual lease rates have contracted
Sharjah's residential property market is starting to show signs of softening at the end of 2015, according to real estate consultancy Cluttons.
According to its Sharjah 2015/2016 Winter Property Market Snapshot, residential rents during the third quarter of 2015 stagnated and recorded a marginal 0.3 percent increase, while year-on-year rents were 1.6 percent lower.
Cluttons said this is the first time in over two years that average annual residential lease rates have contracted, but added that demand still remains for high quality stock and gated community living.
Faisal Durrani, head of Research at Cluttons said: "Rising supply levels across many areas of Sharjah, coupled with price reductions in Dubai offering a shorter commute and increasing value for money in Ajman are starting to undermine rents.
"However, well-managed buildings that are perceived to offer better quality and increased facilities still have longer waiting lists than lower quality buildings and continue to drive demand. At the same time we are seeing reduced waiting lists for what is perceived to be lower quality stock."
The report said that new communities and gated villas have continued to outperform the wider residential market, particularly apartments, with rents rising by 4.1 percent during the first nine months of 2015.
Suzanne Eveleigh, property management director at Cluttons said: "We're experiencing a rise in the popularity of gated community living, and the relative affordability of Sharjah's villa communities is helping to sustain the steady level of tenant requirements."
The report highlights that this is in part due to developers focusing on this segment of the market, with the latest scheme to emerge being the AED20 billion Sharjah Waterfront City, where 1,500 villas are planned.
In the commercial market, office rents across the city's main submarkets registered no change during Q3, Cluttons said.
Eveleigh added: "The ability of office rents to maintain their stability will very much depend on how the wider UAE economy fares in the face of the current global economic headwinds and the prolonged period of low oil prices."